The COVID-19 pandemic has accelerated and exacerbated long-standing corporate challenges to employee health and well-being, and in particular employee mental health.1 This has resulted in reports of rapidly rising rates of burnout2 around the world (see sidebar “What is burnout?”).
Many employers have responded by investing more into mental health and well-being than ever before. Across the globe, four in five HR leaders report that mental health and well-being is a top priority for their organization.3 Many companies offer a host of wellness benefits such as yoga, meditation app subscriptions, well-being days, and trainings on time management and productivity. In fact, it is estimated that nine in ten organizations around the world offer some form of wellness program.4
As laudable as these efforts are, we have found that many employers focus on individual-level interventions that remediate symptoms, rather than resolve the causes of employee burnout.5 Employing these types of interventions may lead employers to overestimate the impact of their wellness programs and benefits6 and to underestimate the critical role of the workplace in reducing burnout and supporting employee mental health and well-being.7
Research shows that, when asked about aspects of their jobs that undermine their mental health and well-being,8 employees frequently cite the feeling of always being on call, unfair treatment, unreasonable workload, low autonomy, and lack of social support.9 Those are not challenges likely to be reversed with wellness programs. In fact, decades of research suggest that interventions targeting only individuals are far less likely to have a sustainable impact on employee health than systemic solutions, including organizational-level interventions.10
Since many employers aren’t employing a systemic approach, many have weaker improvements in burnout and employee mental health and well-being than they would expect, given their investments.
Organizations pay a high price for failure to address workplace factors11 that strongly correlate with burnout,12 such as toxic behavior.13 A growing body of evidence, including our research in this report, sheds light on how burnout and its correlates may lead to costly organizational issues such as attrition.14 Unprecedented levels of employee turnover—a global phenomenon we describe as the Great Attrition—make these costs more visible. Hidden costs to employers also include absenteeism, lower engagement, and decreased productivity.15
In this article, we discuss findings of a recent McKinsey Health Institute (MHI) (see sidebar “The McKinsey Health Institute: Join us!”) global survey that sheds light on frequently overlooked workplace factors underlying employee mental health and well-being in organizations around the world. We conclude by teeing up eight questions for reflection along with recommendations on how organizations can address employee mental-health and well-being challenges by taking a systemic approach focused on changing the causes rather than the symptoms of poor outcomes. While there is no well-established playbook, we suggest employers can and should respond through interventions focused on prevention rather than remediation.
We are seeing persistent burnout challenges around the world
To better understand the disconnection between employer efforts and rising employee mental-health and well-being challenges (something we have observed since the start of the pandemic), between February and April 2022 we conducted a global survey of nearly 15,000 employees and 1,000 HR decision makers in 15 countries.16
The workplace dimensions assessed in our survey included toxic workplace behavior, sustainable work, inclusivity and belonging, supportive growth environment, freedom from stigma, organizational commitment, leadership accountability, and access to resources.17 Those dimensions were analyzed against four work-related outcomes—intent to leave, work engagement, job satisfaction, and organization advocacy—as well as four employee mental-health outcomes—symptoms of anxiety, burnout, depression, and distress.18 Individual adaptability was also assessed19 (see sidebar “What we measured”).
Our survey pointed to a persistent disconnection between how employees and employers perceive mental health and well-being in organizations. We see an average 22 percent gap between employer and employee perceptions—with employers consistently rating workplace dimensions associated with mental health and well-being more favorably than employees.20
In this report—the first of a broader series on employee mental health from the McKinsey Health Institute—we will focus on burnout, its workplace correlates, and implications for leaders. On average, one in four employees surveyed report experiencing burnout symptoms.21 These high rates were observed around the world and among various demographics (Exhibit 1),22 and are consistent with global trends.23
So, what is behind pervasive burnout challenges worldwide? Our research suggests that employers are overlooking the role of the workplace in burnout and underinvesting in systemic solutions.
Employers tend to overlook the role of the workplace in driving employee mental health and well-being, engagement, and performance
In all 15 countries and across all dimensions assessed, toxic workplace behavior was the biggest predictor of burnout symptoms and intent to leave by a large margin24—predicting more than 60 percent of the total global variance. For positive outcomes (including work engagement, job satisfaction, and organization advocacy), the impact of factors assessed was more distributed—with inclusivity and belonging, supportive growth environment, sustainable work, and freedom from stigma predicting most outcomes (Exhibit 2).
The danger of toxic workplace behavior—and its impact on burnout and attrition
Across the 15 countries in the survey, toxic workplace behavior is the single largest predictor of negative employee outcomes, including burnout symptoms (see sidebar “What is toxic workplace behavior?”). One in four employees report experiencing high rates of toxic behavior at work. At a global level, high rates were observed across countries, demographic groups—including gender, organizational tenure, age, virtual/in-person work, manager and nonmanager roles—and industries.25
Toxic workplace behaviors are a major cost for employers—they are heavily implicated in burnout, which correlates with intent to leave and ultimately drives attrition. In our survey, employees who report experiencing high levels of toxic behavior26 at work are eight times more likely to experience burnout symptoms (Exhibit 3). In turn, respondents experiencing burnout symptoms were six times more likely to report they intend to leave their employers in the next three to six months (consistent with recent data pointing to toxic culture as the single largest predictor of resignation during the Great Attrition, ten times more predictive than compensation alone27 and associated with meaningful organizational costs28). The opportunity for employers is clear. Studies show that intent to leave may correlate with two- to three-times higher29 rates of attrition; conservative estimates of the cost of replacing employees range from one-half to two times their annual salary. Even without accounting for costs associated with burnout—including organizational commitment30 and higher rates of sick leave and absenteeism31—the business case for addressing it is compelling. The alternative—not addressing it—can lead to a downward spiral in individual and organizational performance.32
Individuals’ resilience and adaptability skills may help but do not compensate for the impact of a toxic workplace
Toxic behavior is not an easy challenge to address. Some employers may believe the solution is simply training people to become more resilient.
There is merit in investing in adaptability and resiliency skill building. Research indicates that employees who are more adaptable tend to have an edge in managing change and adversity.33 We see that edge reflected in our survey findings: adaptability acts as a buffer34 to the impact of damaging workplace factors (such as toxic behaviors), while magnifying the benefit of supportive workplace factors (such as a supportive growth environment) (Exhibit 4). In a recent study, employees engaging in adaptability training experienced three times more improvement in leadership dimensions and seven times more improvement in self-reported well-being than those in the control group.35
However, employers who see building resilience and adaptability skills in individuals as the sole solution to toxic behavior and burnout challenges are misguided. Here is why.
Individual skills cannot compensate for unsupportive workplace factors. When it comes to the effect of individual skills, leaders should be particularly cautious not to misinterpret “favorable” outcomes (for example, buffered impact of toxic behaviors across more adaptable employees) as absence of underlying workplace issues that should be addressed.36
Also, while more adaptable employees are better equipped to work in poor environments, they are less likely to tolerate them. In our survey, employees with high adaptability were 60 percent more likely to report intent to leave their organization if they experienced high levels of toxic behavior at work than those with low adaptability (which may possibly relate to a higher level of self-confidence37). Therefore, relying on improving employee adaptability without addressing broader workplace factors puts employers at an even higher risk of losing some of its most resilient, adaptable employees.
What this means for employers: Why organizations should take a systemic approach to improving employee mental health and well-being
We often think of employee mental health, well-being, and burnout as a personal problem. That’s why most companies have responded to symptoms by offering resources focused on individuals such as wellness programs.
However, the findings in our global survey and research are clear. Burnout is experienced by individuals, but the most powerful drivers of burnout are systemic organizational imbalances across job demands and job resources. So, employers can and should view high rates of burnout as a powerful warning sign that the organization—not the individuals in the workforce—needs to undergo meaningful systematic change.
Taking a systemic approach means addressing both toxic workplace behavior and redesigning work to be inclusive, sustainable, and supportive of individual learning and growth, including leader and employee adaptability skills. It means rethinking organizational systems, processes, and incentives to redesign work, job expectations, and team environments.
As an employer, you can’t “yoga” your way out of these challenges. Employers who try to improve burnout without addressing toxic behavior are likely to fail. Our survey shows that improving all other organization factors assessed (without addressing toxic behavior) does not meaningfully improve reported levels of burnout symptoms. Yet, when toxic behavior levels are low, each additional intervention contributes to reducing negative outcomes and increasing positive ones.
The interactive graphic shows the estimated interplay between the drivers and outcomes, based on our survey data (Exhibit 5).
Taking a preventative, systemic approach—focused on addressing the roots of the problem (as opposed to remediating symptoms)—is hard. But the upside for employers is a far greater ability to attract and retain valuable talent over time.
The good news: Although there are no silver bullets, there are opportunities for leaders to drive material change
We see a parallel between the evolution of global supply chains and talent. Many companies optimized supply chains for “just in time” delivery, and talent was optimized to drive operational efficiency and effectiveness. As supply chains come under increasing pressure, many companies recognize the need to redesign and optimize supply chains for resilience and sustainability, and the need to take an end-to-end approach to the solutions. The same principles apply to talent.
We acknowledge that the factors associated with improving employee mental health and well-being (including organizational-, team-, and individual-level factors) are numerous and complex. And taking a whole-systems approach is not easy.
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Despite the growing momentum toward better employee mental health and well-being (across business and academic communities), we’re still early on the journey. We don’t yet have sufficient evidence to conclude which interventions work most effectively—or a complete understanding of why they work and how they affect return on investment.
That said, efforts to mobilize the organization to rethink work—in ways that are compatible with both employee and employer goals—are likely to pay off in the long term. To help spark that conversation in your organization, we offer eight targeted questions and example strategies with the potential to address some of the burnout-related challenges discussed in this article.
Do we treat employee mental health and well-being as a strategic priority?
This is fundamental to success. When a large organization achieved a 7 percent reduction in employee burnout rates (compared with an 11 percent increase in the national average within the industry over the same period), the CEO believed that leadership and sustained attention from the highest level of the organization were the “key to making progress.”38 Senior executives recognized employee mental health and well-being as a strategic priority. Executives publicly acknowledged the issues and listened to employee needs through a wide range of formats—including town halls, workshops, and employee interviews (our research suggests that leaders are not listening to their people nearly enough). They prioritized issues and defined clear, time-bound measurable goals around them—with a standardized measure of burnout being given equal importance to other key performance metrics (financial metrics, safety/quality, employee turnover, and customer satisfaction). Although anonymous at the level of the individual, results were aggregated at division/department level to allow executive leadership to focus attention and resources where they were most needed.39 This example highlights how CEOs have the ability to create meaningful change through listening to employees and prioritizing strategies to reduce burnout.
Do we effectively address toxic behaviors?
Eliminating toxic workplace behavior is not an easy task. Organizations that tackle toxic behavior effectively deploy a set of integrated work practices to confront the problem,40 and see treatment of others as an integral part of assessing an employee’s performance. Manifestations of toxic behavior41 are flagged, repeat offenders either change or leave, and leaders take time to become aware of the impact their behavior has on others. If you lead part of an organization, looking at your own behaviors, and what you tolerate in your own organization, is a good place to start.42
Another component of eliminating toxic behavior is cultivating supportive, psychologically safe work environments, where toxic behaviors are less likely to spread across the organization.43 Effective leaders know that emotional contagion44 may go both ways: displaying vulnerability and compassion fuels more compassionate teams; displaying toxic behavior fuels more toxic teams.45 There are two caveats: toxic behavior may not be intentional—particularly if individuals are not equipped to respond with calm and compassion under pressure—and regardless of intent, toxic behavior spreads faster and wider than good behavior.46 To prevent unintentional dissemination of toxic behaviors, role modeling from adaptable, self-regulating, compassionate leaders may help (see sidebar “Leaders with higher self-regulation may be better, less toxic leaders”).
Do we create inclusive work environments?
Most leaders recognize the established associations between performance and inclusion, but inclusion does not happen by accident. Inclusion is a multifaceted construct that must be addressed comprehensively and proactively. Most companies define inclusion too narrowly and thus address it too narrowly as well. Over the past three years, we’ve broadened our perspective on how to create truly inclusive workplaces and developed a modern inclusion model. The model includes 17 practices (based on frequency of desired behaviors) and six outcomes (based on perceptions of effectiveness). Each practice falls into one of three relationships that shape workplace inclusion: organizational systems, leaders, and peers/teammates.
The 17 inclusive-workplace practices, when done consistently well, drive workplace inclusion and equity for all employees by providing clarity into actions that matter. For example, among employees working in hybrid models, work–life support was the top practice employees desired improvements on—with nearly half of employees recommending prioritizing policies that support flexibility—including extended parental leave, flexible hours, and work-from-home policies.
A truly inclusive workplace implements systems that minimize conscious and unconscious bias, allowing employees to express themselves and connect with each other. It also features leaders who not only advocate for team members and treat them impartially but also uphold and support all organizational systems and practices. For example, one employer defined data-driven targets for the representation and advancement of diverse talent across dimensions (beyond gender and ethnicity) and role types (executive, management, technical, board)—leveraging powerful analytics to track progress and foster transparency along the way.
Do we enable individual growth?
Evidence suggests that individual growth, learning, and development programs are effective47 ways to combat burnout and to retain and engage employees, and therefore are important for addressing growing talent and skills shortages within organizations. Employers who “double down” on talent redeployment, mobility, reskilling, and upskilling tend to see improvement across a range of financial, organizational, and employee experience metrics. In a recent study of extensive employee data, offering lateral career opportunities was two-and-half times more predictive of employee retention than compensation, and 12 times more predictive than promotions48 —signaling an opportunity for leaders to support employee desires to learn, explore, and grow way beyond traditional career progression.
Investing in your employees’ capabilities can drive financial returns, is often cheaper than hiring, and signals to employees that they are valued and have an important role in the organization.
Do we promote sustainable work?
Promoting sustainable work goes beyond managing workload. It’s about enabling employees to have a sense of control and predictability, flexibility, and sufficient time for daily recovery. It’s also about leading with compassion and empathy49—tailoring interventions based on where, when, and how work can be done, and how different groups are more likely to (re)establish socio-emotional ties after a long period of isolation and loss of social cohesion.
One technology company is using real-time data on employee preferences to rapidly test and iterate solutions that work for specific groups around return-to-office options. To find solutions that work for your employees, consider adopting a test-and-learn mindset. This approach can help the organization make progress while adapting as context evolves (a hallmark of more productive organizations).
Are we holding leaders accountable?
Many organizations consider people leadership criteria in their performance management. Yet, there is substantial room to grow when it comes to employers providing transparency around employee mental-health and well-being objectives and metrics.50
Organizations that are doing this well have set clear expectations for managers to lead in a way that is supportive of employee mental health and well-being.51 They offer training to help managers identify, proactively ask about, and listen to employees’ mental-health and well-being needs. They also introduce mental-health “pulse” checks and incorporate relevant questions into the broader employee satisfaction surveys, to establish a baseline and track trends in how employees are feeling. Discussion on employee mental health and well-being can be incorporated into regular leadership meetings, including concerns, risks, and potential actions.
To encourage leaders to lead by example and increase their accountability, some employers embed employee mental-health support into leaders’ reviews based on anonymous upward feedback from their teams. Finally, some companies are exploring if they can go even further and tie incentives to short- and long-term employee mental-health and well-being objectives.
Are we effectively tackling stigma?
As noted in a previous McKinsey article, the majority of employers and employees acknowledge the presence of stigma52 in their workplaces. Stigma has been shown to have real costs to workforce productivity, often exacerbating underlying conditions because of people being afraid to seek help for mental-health needs and driving down an employee’s self-worth and engagement.
We see several actions that organizations are taking to eliminate stigma.53 Leading by example can make a difference, with senior leaders stepping forward to describe personal struggles with mental health, using nonstigmatizing language.54 Leaders showing vulnerability helps to remove shame and promote a psychologically safe culture.55
Stigma can also be reduced by companies prioritizing mental wellness as critical for peak performance instead of rewarding overwork at the expense of rest and renewal—rewarding an “athlete” mindset instead of overemphasizing a “hero.” This can begin to shift perception of signs of burnout or other mental-health needs as being indicative of a moral failing. Finally, creating a dedicated role to support employee mental health and well-being and appointing a senior leader, such as chief wellness officer, will increase awareness and show commitment.
Do our resources serve employee needs?
Leaders should evaluate whether mental-health and well-being resources are at parity with physical-health benefits and how frequently they are being used by employees. An increasing number of employers have expanded access to mental-health services56; however, research shows that almost 70 percent of employees find it challenging to access those services.
In a previous survey, 45 percent of respondents who had left their jobs cited the need to take care of family as an influential factor in their decision (with a similar proportion of respondents who are considering quitting also citing the demands of family care). Expanding childcare, nursing services, or other home- and family-focused benefits could help keep such employees from leaving and show that you value them. Patagonia, long the standard-bearer for progressive workplace policies, retains nearly 100 percent of its new mothers with on-site childcare and other benefits for parents.
Never in history have organizations around the world devoted so much attention and capital to improving employee mental health and well-being. It is lamentable that these investments are not always providing a good return regarding improved outcomes. Employers that take the time to understand the problem at hand—and pursue a preventative, systemic approach focused on causes instead of symptoms—should see material improvements in outcomes and succeed in attracting and retaining valuable talent. More broadly, employers globally have an opportunity to play a pivotal role in helping people achieve material improvements in health. With collaboration and shared commitment, employers can make a meaningful difference in the lives of their employees and the communities they live in.
The McKinsey Health Institute (MHI) is collaborating with leading organizations around the world to achieve material improvements in health—adding years to life and life to years. As part of that, MHI is focused on improving employee mental health and well-being at scale—in a way that is good for business, for employees, and for the communities they live in.
To stay updated about MHI’s initiative on employee mental health and well-being, sign up at McKinsey.com/mhi/contact-us.
