Why Organisations Should Care About Burnout and Threat State Brains

By Sonya Hughes & Justin Miles

Lately we’ve been exploring, burnout and the prevalence of “threat state brain”. These are not issues facing some employees, they’re cultural challenges that undermine your organisational performance.

Here’s the business case for addressing these problems as a top priority:

1. The Talent Exodus

When burnout becomes normalised within your culture, employees with agency “vote with their feet”. We’re witnessing a trend where experienced senior leaders are stepping away from corporate roles due to ongoing burnout and stress. While the cost of replacing employees can range from 50% to 150% of their salary, the opportunity cost of the loss of knowledge and experience can be even higher.

2. Impaired Cognitive Function

A threat redirects blood flow away from the prefrontal cortex, the part of the brain responsible for creative thinking, decision-making, and problem-solving. When people are in threat state, innovation stalls, decisions are delayed, and problems are harder to solve. This loss of creativity and productivity costs businesses approximately $31 billion pa (highlighted by Gallup and Safe Work Australia).

3. Erosion of Relationships and Connection

In a threat state, individuals become self-focused, losing sight of collaboration and relationship-building. This is particularly harmful in organisations with siloed cultures and where back-to-back meetings underpin a lack of meaningful interaction and connection. The ability to cooperate and collaborate in teams also drops.

4. Defensive Crouch Mindset

A lack of trust within your culture creates a defensive mindset, where employees feel like they’re going into battle every time they attend a meeting. This constant state of readiness for conflict wastes time, drains energy, and hampers productivity, contributing to the $10.9 billion annual cost of workplace mental health conditions in Australia (PWC research indicates this is the cost of burnout and mental health in the workplace).

5. Financial and Legal Consequences

The financial impact of burnout and threat state brain extends far beyond lost talent. Australian businesses are also facing large costs due to absenteeism, presenteeism, and workers’ compensation claims related to stress and burnout. Work-related stress claims alone cost businesses an average of $146,000 per claim. Additionally, companies risk reputational damage, making it harder to attract and keep top talent in Australia’s competitive job market.

6. Impact on Company Culture and Trust

Burnout and chronic stress lead to toxic workplace cultures, reducing trust and collaboration among employees. This erosion of trust and connection hampers long-term strategic goals, including innovation and growth. This reflects the opportunity cost of what is left on the table when your culture doesn’t create the environment for people to deliver their best work

Conclusion

The costs of burnout and a threat state brain are immense, impacting performance and the health of your organisation. Addressing these issues is a strategic imperative that can save your business millions. It’s time to take proactive steps to create a workplace that fosters trust, creativity, and connection and is an environment where people and your business can thrive.

The cost of doing nothing is too high. Let’s change the game together.

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Justin Miles

Manager Partner, Melbourne at Generator Talent

Justin is the Managing Partner of our Melbourne office, an outcome focused leader with a track record of driving business performance through proven talent and organisation development practices. Justin’s methods and skills have been shaped by working with performance oriented leaders in great companies including PepsiCo, The Campbell Soup Company, Diageo, Rip Curl, Fonterra and Wesfarmers, in Australia, the USA and Latin America.