Insights and resources for employers and professionals.

The Cost of Disengaged Employees

A Case Study

8:00 AM John is an office employee at ABC manufacturing. When he arrives at work he logs into his workstation and heads off to the break room to grab a cup of coffee. John runs into a few co-workers there and they catch up on current events, family dramas, and the latest work gossip.

8:20 AM John returns to his desk. He opens his first work order and begins to enter client information.

8:25 AM John’s cell phone vibrates. It’s one of his buddies inviting him to play an executive round of golf after work. John replies that he’s all-in, and that he’ll text him when he’s chosen a course. John opens up his internet browser and does a quick Google search to determine what courses are in between his home and his friend’s. There are 20 courses. John selects five that he has played at before to see if they have an executive course, and find out if they have late afternoon tee-times. Using the online reservation feature John reserves a tee-time for 4:30 PM. He texts his friend back to say that he’ll duck out from work at about 3:30 so he can swing by his house to pick up his golf clubs.

9:00 AM John returns to the first work order and continues to enter the client’s information.

John has been at the office for an hour, but he’s only completed five minutes of work. He gets paid $35 per hour, and so far he’s only earned $2.92 of it. In addition to the 55 minutes he’s spent socializing and addressing personal matters, John has also managed to shorten his workday from 5:00 PM to 3:30 PM; another 1.5 hours of lost time. It’s only 9:00 AM and John has made it clear that he’s not at work to work. John is a disengaged employee.

What is Employee Engagement?

Employee engagement is the degree to which an employee is willing to perform the duties of their job. This includes, but isn’t limited to, the act of collaborating with co-workers, working toward the accomplishment of company goals, embracing company values, and ultimately contributing to the profitability of a company. Employees can be positively or negatively engaged with their work environment. Positively engaged employees report a sense of high satisfaction with their jobs and lives outside of work. Negative employee engagement has an impact on both company morale and financial success.

The Landscape

According to a 2014 Gallup poll, just 31.5% of U.S. employees reported being “engaged” in their work. This is the highest level of engagement since 2000, but the majority of employees (51%) are still “not engaged” and 17.5% are “actively disengaged.”

Gallup goes on to share the following:
  • Managers have the highest level of engagement – 38.4%

  • Employees in manufacturing/production have the lowest level of engagement – 23%

  • Traditionalists are the most engaged – 42.2%

  • Millennials are the least engaged – 28.9%

Those numbers aren’t great. In fact, those numbers are terrible. What’s the deal?
Time is Money

In retail organizations, the biggest source of loss (i.e. theft) is employees. In service-oriented businesses, it’s no different: the biggest source of loss is employees. While they may not be stealing merchandise or cash from a register, they are stealing time from the company through disengagement. As any employer knows, the loss of time is equivalent to the loss of money through lost revenue and wages. (Ever heard someone say, “Time is money!”?)

Gallup’s research shows that employee disengagement costs the U.S. economy a whopping $450-$550 billion dollars per year. By linking employee engagement to monetary amounts, we’re able to conclude that employee engagement isn’t a “soft” issue, it‘s connected to the bottom line. Employee disengagement also negatively impacts employees’ relationships, both internally and with external customers.

So there’s the prognosis. Now for the good news: employee disengagement is preventable!
Engaging Employees

How do we as employers promote employee engagement in our organizations? Warren Buffet teaches us that corporate culture is crucial to success. Corporate culture takes time to build – it must be taught from the top down, reinforced by management, and presented consistently in the company’s messaging. And above all, it must be rewarded when followed. Positive reinforcement is one of the strongest ways to motivate employees because it not only encourages repetition of positive behavior, but it changes the way the employees see themselves.

Employers seeking to engage their employees should consider the following strategies and tactics:

  • Strengthen the relationship between managers and employees. Managers are traditionally the most engaged employee population. Employee productivity and employee retention are both directly correlated to the relationship that an employee has with his or her manager.

  • Align employee work with company goals. Employees are more engaged with their clients, their co-workers, and their work environment when they are able to see how their work fits into the big picture.

  • Conduct a human capital analysis. You put your financial capital to work, so put your human capital to work too. Every employer thinks about what sort of savings and investment choices will maximize their dollars, but you should also be looking at what sort of work is going to maximize your employees’ intellectual capital. Just because an employee isn’t a great fit for one position, doesn’t mean they don’t fit anywhere in your organization. If you re-engage them in a way that maximizes the use of their skills and talents, you’ll ultimately benefit both your company and the employee.

  • Assess employee needs. Employers spend a great deal of time determining and catering to the needs of their customers, yet many aren’t attuned to the needs of their internal customers: employees. The most efficient way to gauge employee needs is by conducting an employee satisfaction survey. Once you understand what your employees appreciate about their workplace and where they see room for improvement, you’ll know how and where to target your efforts.

If you fear that your company is suffering from employee disengagement, don’t sweep the issue under the rug. Use the tips above to address the problem head on, showing your employees that you’re not only invested in the success of the business, but their personal and professional growth. An engaged workforce is a healthy workforce, and that’s the strongest asset a company can have.