Cost Breakdown

Formula used.

The exact formula used may vary depending on your organisations variables but the popular approach is
Cost of Burnout=(Absenteeism Cost)+(Lost Productivity)+(Turnover Cost).

Absenteeism Cost = Number of absent days × Daily wage × Employees affected
Productivity Cost = Productivity loss % × Total salary cost
Turnover Cost = Replacement cost (1.0x salary is a good indicator) × Employees who left
Team Contagion Effect = 10 days sick leave x £200 daily wage x 10% of employees leader responsible for

Despite this many companies just use the simple formula of Cost of Burnout=(1.5xSalary), as this is widely reported to be the average cost of burnout per employee, however for leaders this can often be up to 4x salary.

Example breakdown.

Absenteeism Cost = 10 (absent days) × £385 (daily wage) × 1 (no. leaders)
Productivity Cost = 15 % (productivity loss) × £100,000 (total salary)
Turnover Cost = £100,000 (replacement cost, inc. recruitment/training/temp cover) × 1
Team Contagion Effect = 10 (sick days) x £200 (daily wage) x 2 (assuming 10% of 20 team members)

Total Leadership Burnout Cost = £3850 + £15,000 + £100,000 + £4000 = £122,850
Estimated Prevention Investment = £18,000

A good rule is to invest 10%-15% of projected burnout cost into solutions for consistent ROI.