The Hidden Costs of Overwork: How Demanding Employers Can Ultimately Harm Their Own Performance

Strategic Insights -

As many employers increasingly demand more hours from their workers, a growing body of research suggests that this approach may ultimately hinder the performance they seek. When employees are pushed to work excessively long hours, their mental and physical health suffers, leading to burnout, turnover, and reduced productivity. In fact, a Gallup analysis found that even engaged employees are twice as likely to burn out if they log more than 45 hours a week. This can lead to significant costs for employers, including the loss of institutional knowledge and unique connections when departing employees leave.

Key Takeaways:

  • A study of 70 studies on how managers support workers' family lives found that when supervisors show consideration for workers' personal roles, those employees are more loyal and helpful on the job and are also less likely to think about quitting.
  • Another study found that workers who could take on creative projects outside of work became more creative at work, regardless of their own personalities.
  • Employers like Cisco, Booz Allen Hamilton, and Intuit, which promote work-life balance, have higher Glassdoor employee ratings and offer flexible work options, benefits to promote mental and physical well-being, and mindfulness and meditation training.
  • Research from a team of researchers studying the workforce at a large city hospital found that when employees' bosses supported their family life, they were happier with their jobs, more loyal, and less likely to quit.
  • The mental health consequences of overwork, including burnout and increased risk of stroke and heart disease, are significant and measurable.
  • Burnout can lead to significant costs for employers, ranging from $4,000 to $20,000 per employee per year, including missed workdays and reduced productivity.
  • High turnover rates are also a result of overwork, with employers facing costs ranging from 1.5 to two times an employee's annual salary.

Statistics:

  • The World Health Organization found a 35% higher risk of having a stroke and a 17% higher risk of developing heart disease associated with working more than 55 hours per week.
  • A Gallup analysis found that engaged employees who log more than 45 hours a week are twice as likely to burn out.
  • The cost of burnout for employers ranges from $4,000 to $20,000 per employee per year.
  • Conservative estimates of the cost of turnover for employers range from 1.5 to two times an employee's annual salary.

Sources:

  • World Health Organization
  • Gallup
  • Glassdoor
  • Daniel Kahneman (late psychologist and Nobel Prize winner)
  • Simone Biles (professional gymnast)
  • Albert Einstein (theoretical physicist)
  • World Health Organization
  • Louis Tay (Professor of Industrial-Organizational Psychology, Purdue University)
  • ExpiWell (mobile-first tech startup)
  • Contify.com
  • The Conversation -- USA (2)