Disengaged workers cost businesses a lot more than they might realize. Those employees are what the Gallup organization defines as “unhappy and unproductive at work and liable to spread negativity to coworkers.”
Their loss of productivity, quality defects, and other factors lead to reduced profitability. While companies generally believe that employee engagement is important to business success, many question whether investing in employee engagement is effective and a good use of resources. The fact is, investing in employee engagement drives higher ROI than simply letting disengaged, listless employees fall through the cracks.
So, let’s explore this issue in depth.
Here’s the Problem
Disengagement with one’s job is like a physical illness because it robs an employee of the enthusiasm and challenges he or she would normally feel. It severs one’s emotional connection to the job, to fellow workers, and the company and its organizational goals. Rather than working to solve problems, to capitalize on opportunities, and to advance one’s self, the disengaged employee comes to work primarily (sometimes exclusively) for the paycheck.
The Gallup organization has worked for years with companies around the globe to assess the impact of disengagement. They’ve built a database of 35 million employees to assess the scope of the problem, and found more than one in six (17.2 percent) employees are not engaged with their jobs. Those employees are absent from work 37 percent more often than engaged employees. They exhibit 18 percent lower productivity and 15 percent lower profitability.
From a dollars and cents perspective, each disengaged employee wastes about one-third (34 percent) of his or her salary through low productivity, absenteeism, negativity, and other behaviours. That’s $3,400 for every $10,000 in salary. Do the math using the headcount and median salary for your company. You’ll find that disengaged employees put a gigantic drag on both revenue and profitability that, for large corporations, can run into billions of dollars.
Calculate the ROI You’ll Expect from Investing in Workers
Today, with companies losing so much money due to disengaged workers, they need to act. First though, they will want to determine if the investment they’ll make in workplace programs to re-engage employees will deliver an ROI.
They’ll want to consider the current cost of disengagement in their calculation. For instance, using the figures above from the Gallup organization — showing about one-sixth of employees are not engaged with work, while about one-third of those peoples’ salaries go to waste — you can quickly see that’s equivalent to almost six percent of the company’s total payroll. For a 50-employee company with a median payroll of $50,000 per year, that’s more than $146,000 wasted, and the numbers get exceptionally large at larger companies.
According to Karlyn Borysenko at Forbes, “The value of employee engagement is unquestionable, with slight gains in a more engaged workforce resulting in a significant return on investment when compared with the costs.”
A study by Glassdoor.com found “companies with engaged employees outperform those without by more than 200%, and companies that invested 10% more in employee engagement also increased company profits by $2,400 per employee per year.
Tips On Solving the Problem
The fundamental solution lies in giving people genuine support, attention, and reward for the work they do. This must begin with top management and carry through to front-line supervisors. Gallup points out that “at least 70 percent of the variance in employee engagement is due to differences [strengths and weaknesses] in supervisors and managers,” which suggests that some may need additional training.
Once management at all levels begins moving forward, there are two possible paths they can take to re-engage your workforce.
The first relies on proven human resources and psychological strategies. For example, listening to feedback from workers, giving employees a voice in their concerns, then taking action to resolve the issue — these and similar approaches all lead toward a solution. The Society for Human Resource Management (SHRM), long a go-to authority on H.R. matters, offers a roadmap to solving the problem, and they’re one of many who offer help or advice.
The second path solves the problem by establishing a company culture. It could be a culture that focuses on quality, while another could build a culture based upon safety. There’s no single type of culture that is right for every company, but where a strong company culture exists, disengagement falls away.
According to CultureIQ.com and its findings over more than 50 years of research, “Employee engagement is a direct result of a strong company culture. The stronger a company’s culture, the better employees understand what is expected of them and what they’re working toward. Engaged employees are more likely to stay happy, motivated, and committed to your company.”
How Anvl Can Help
Anvl’s award-winning software drives worker engagement, productivity, and collaboration while providing an easy-to-use application for all stakeholders. Anvl kickstarts employee engagement to drive positive culture changes. We’re here to help make it easy by partnering with you on process design, training, and on-going changes. We are ready to get you up and running in just days for an immediate and long term ROI.