Neglecting employee’s well-being in the workplace: Consequences & how to cope!
Companies ignoring employee wellbeing lose $322B annually to turnover and presenteeism (Gallup). Prioritising it isn’t kindness—it’s survival.
It’s natural to face difficult phases at work, but it becomes problematic when these difficulties linger. This can hurt collaboration, communication, motivation, efficiency, and team participation.
Burnout costs employers $190B annually!
The factors that typically come to mind when we talk about well-being at work, are the environment we work in, the team we work with, the tasks we are assigned, and our financial compensation. These are all important considerations when choosing a company to work for.
What happens when employees embark on their job and come across unforeseen obstacles?
How is their efficiency and productivity affected?
This is where the term “efficiency” is crucial:
- How can one perform at their best?
- factors influence efficiency?
- Are efficiency and productivity the same?
Studies show that efficiency fosters positive environments for teams and companies.
What is efficiency?
Looking at the definition in the dictionary, efficiency allows one to perform or function in the best possible manner with the least waste of time and effort; having and using requisite knowledge, skill, and industry; competent; capable.
What is productivity?
While, the definition of productivity remains in the quality, state, or fact of being able to generate, create, enhance, or bring forth goods and services. Companies often prioritise productivity over efficiency, leading to resource waste in some cases.
What about the invisible issues that management may not have the time or resources to address?
How great leader make the difference?
Actionable framework for leaders
“The WELL Leader Framework”
- Watch for signs (burnout red flags)
- Empower autonomy (flex schedules, ownership)
- Listen deeply (psychological safety tactics)
- Link to growth (wellbeing → development plans)
It’s worth noting that even if a company offers competitive compensation, exciting projects, and a great team, hidden issues can still negatively impact employee efficiency, happiness, well-being, and motivation.
Therefore, it’s vital for companies not only to address the visible factors but also the hidden ones to ensure a positive and productive work environment.
It is important to mention there are certain unseen factors that can impact a company’s efficiency, productivity, image, and revenues. If these underlying problems are not dealt with, they can negatively affect both employees and employers. Hence, it’s crucial for both parties to take the necessary steps to tackle these issues.
What is the estimated burnout cost?
(Avg. Salary × 20%) × # of Burnt-Out Employees = Annual Burnout Cost
Example: ($80,000 × 0.20) × 10 employees = $160,000 lost
For employees, leaving their current job is never an easy decision. They understand the risks and consequences of moving to another company. However, they would still prefer to take the leap of faith rather than remain in a company where something is amiss. This can potentially harm the company’s reputation and image.
What is the estimated recruitment cost?
ROI (%) = [(Savings from Reduced Turnover – Cost of Training) / Cost of Training] × 100
Leadership (leadership/wellbeing) cuts turnover cost!
👉Try the calculator now
Step-by-Step: Calculating Recruitment Costs
*(For a single mid-level hire @ $80k salary)*
| Cost Category | Calculation | Example Cost |
|---|---|---|
| 1. Sourcing & Ads | Job boards + agency fees | $3,500 |
| 2. HR/Manager Time | 40 hrs × $50/hr (loaded cost) | $2,000 |
| 3. Interviews | 8 interviewers × 2 hrs × $75/hr | $1,200 |
| 4. Onboarding | Training, systems, HR time | $4,000 |
| 5. Lost Productivity | 3 mos ramp-up × 50% output loss | $10,000 |
| 6. Opportunity Cost | Projects delayed during vacancy | (Estimate) |
| TOTAL COST PER HIRE | $20,700+ |
💡 *Source: SHRM estimates avg. US hire costs 6-9 months salary ($40k-$60k for $80k role).*
How training impacts ROI: The math
Scenario:
-
The client has 100 employees
-
Annual turnover rate: 20% (= 20 hires/year)
-
Your wellbeing/leadership training reduces turnover by 30% (to 14%)
Calculations:
Before training:
Turnover Cost = 20 hires × $40,000 = $800,000/year
After training (30% reduction):
Turnover Cost = 14 hires × $40,000 = $560,000/year
- Savings = $240,000
- Training Investment = $50,000
- Net Gain = $190,000
- ROI: [($240,000 – $50,000) / $50,000] × 100 = 380% ROI
Acme Co. saved $410k in recruitment costs within 10 months of implementing a leadership wellbeing program.
Myth vs. Fact
| Myth | Fact |
|---|---|
| “Wellbeing is expensive” | “Turnover costs up to 2X salary per exit” |
| “It’s just about yoga classes” | “Core drivers are psychological safety & autonomy” |
On the employer’s side, finding a suitable replacement for a departing employee can be a costly and time-consuming process. When someone leaves, it can affect various departments and clients, leading to breakdowns in internal and external communication. Therefore, it’s essential to address any root causes to prevent employees from leaving the organization and ensure the company’s continued success.
It is often overlooked by companies how detrimental it can be to lose crucial members of their team. While it may be a common belief that anyone can be replaced, the truth is that the loss of a valuable employee can come with a significant cost.
What actions are you taking within your organization to improve the mental well-being of your employees?
Ceicia offers effective solutions to foster continuous improvement and minimize the risk of losing valuable talent.
Stay tuned. Ceicia publishes one article per month, related to different subjects.
Ceicia’s founder