True cost of disengaged employees, how to solve the problem

What is employee disengagement doing to your bottom line? Can you turn employee engagement into a return on investment ( ROI) for your business?

According to the Gallup organization, only one- third of the workforce is engaged. To be clear, Gallup defines an engaged employee as someone who regularly shows discretionary effort in their work.

The average disengaged employee costs their company 34% of their annual salary or $ 3400 on every $ 10,000 of salary. With 38% of employees reporting that their manager is not engaged, it’s no wonder that disengagement costs U. S. businesses over $ 450 billion per year.

Disengaged employees cost companies in more ways than lost salary dollars. What about the lowered productivity and increased levels of client dissatisfaction? These are some of the results of a workforce that doesn’t care about their output. You might ask, what are the causes of disengagement? Before rushing to judgment and firing everyone, here are a few ideas to take into consideration.

According to Forbes magazine, less than 1 in 10 companies have a plan for employee engagement. Here’s another interesting point from Gallup. Only 3 in 10 employees believe their manager cares about their development in the organization. Finally, 75% of workers say they quit a company due to their manager.

Many of these issues can be addressed and improved. What’s more, it pays dividends in the long- term to invest in an employee engagement plan. The returns show up in several meaningful ways, including fewer safety issues, higher productivity and increased client retention. The Corporate Leadership Council reports that companies who build engaged employee teams grow profits three times faster than their competition.

Where to begin?

1. It starts with an engaged CEO. He or she must convey the values, vision and company goals so that everyone knows them and can state them.

2. Regular two- way communication between management and employees is essential. Communicate, communicate, communicate on company goals, values, progress, and even setbacks.

3. Clearly defined expectations for every position are a must. A system for holding team members accountable is part of the plan.

4. Individual job goals are aligned with the CEO’s goals.

5. Individualized employee recognition is part of the formula. A few options are essential to have, as not everyone is motivated by cash rewards. Some like paid time off or verbal recognition.

Many business leaders tell us that remote work is having a negative impact on employee engagement.

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Kathleen Winsor- Games is the VP of Organizational Excellence for Achievement Dynamics in Denver, Colorado. She helps business owners and leaders build world- class cultures and teams. Call 303- 331- 3401 or email to kathleen. winsor- games@ sandler. com.