The Hefty Price of Employee Disengagement
Updated: May 18, 2018
When employees are engaged and happy in the workplace, studies show that organizations are more easily able to transform and achieve goals. High levels of employee engagement, then, is often a celebrated milestone for Human Resources (HR) departments, managers, and executives. At the other end of spectrum, however, is disengagement. What are the causes and effects of disengagement? Are organizations prepared to pay the hefty price for failing to engage employees?
An introduction to disengagement:
50.8% of employees do not consider themselves engaged (Gallup)
About 17% of those employees are actively disengaged
75% of leaders indicate that they do not have any engagement plan or strategy: no steps have been taken to address the problem of low employee engagement. (Edenred)
Some causes of disengagement:
Internal change is the leading cause of disengagement.
Pressures due to cost containment, reduction of staff, and/or mergers
Ongoing uncertainty and lack of job security
Lack of time and motivation (about a fifth of the respondents said there isn’t enough time in a day to feel engaged)
Perception of poor organizational culture (16% of respondents viewed the culture within their organization as unwelcoming to engagement initiatives)
o Lack of learning and development opportunities
o No regular and meaningful feedback
o Lack of succession planning resulting in feelings of uncertainty of career growth
o misalignment of employee and organizational goals
o Lack of recognition
Poor work/life balance
Poor environment such hostilities and bullying in the office
Effects of employee disengagement:
Disengagement can cost up to $450 billion to $550 billion annually due to productivity loss (Gallup)
High turnover rates, which results in a replacement cost of 1.5 to 3 times the cost of the employee’s annual salary
Negative workplace culture
A disengaged workplace can have tremendous negative impacts on an organization’s ability to be productive, initiate changes, and transform. Disengaged staff may not always be hostile or disruptive; lack of enthusiasm in the workplace is often more subtle as employees maintain the status quo eagerly anticipating lunch breaks and clock outs. Employees in this scenario are often absent-minded, less vigilant and concerned, and more likely to be absent or resign. They are also more likely to make mistakes and in worst case scenarios, they do not care about the consequences of their actions.
Gallup estimates that the hefty price tag of disengagement falls between $450-$550 billion per year. What could be done with that extra money? How could you better serve your clients with larger budget and enthusiastic employees? It is, therefore, a must to put employee engagement initiatives on top of your to-do list as soon as possible.
ManageUp is a comprehensive SaaS platform to manage your work and your team. It incorporates team thread/channel communication, task and project management, knowledge sharing, and employee engagement in one platform allowing for full transparency and accountability. ManageUp uses gamification to foster employee engagement and build a culture of teamwork. Learn more about ManageUp at www.manageupprm.com.