The Price of Ignoring Employee Engagement

Tired business woman with headache at seminar

It’s no secret that the majority of today’s workforce is uninterested and unmotivated. According to a recent Gallup poll, 70 percent of U.S. workers say they feel fully disengaged from their workplace and additional 80 percent reported no motivation to go outside of their regular job description.¹

What are the risks associated with disengagement? Consider the costs of working at just 30 percent of your company’s potential. Consider the impact on your brand and reputation and the affect it has on retention and hiring. Employee Engagement doesn’t just affect the workplace; it impacts all aspects of your business.

Disengaged employees don’t speak well of your company

Whether the conversation is taking place online or off, when employees speak badly of you it negatively affects your brand and reputation with customers, prospects and potential job candidates.

Even if disengaged employees don’t actively speak poorly of your business, they’re still highly unlikely to be a positive voice for your company. When employees aren’t saying anything good, sales, hiring and employee retention are all affected in costly ways. Disengaged employees create liabilities that amount to hundreds of billions per year in the U.S. alone. A recent study put that cost at $2,246 per employee each year.²  Additionally, higher percentages of disengagement cause increased turnover at an estimated 48 to 61 percent of the employee’s annual salary, according to the 2005 Watson Wyatt Human Capital Index Report.³

Disengaged employees provide poor customer service

Customer service positions were marked as some of the highest for disengagement in Gallup’s research, an alarming statistic as these people are the ones representing your company and dealing with customers. When employees are unhappy at work, they could potentially be passing that negativity on to customers and prospects through poor customer service.

Employee engagement affects your bottom line

The potential for loss yields some daunting number but, the good news is, there is room to improve. When compared to their competitors, organizations with world-class employee engagement are 18 percent more productive and 12 percent more profitable.¹ Furthermore, engaged employees are 57 percent more effective and 87 percent less likely to leave your company, which translates to higher profits and lower turnover costs, all of which leads to higher profits and increased employee morale.³

While the evidence suggests that improving employee engagement and welfare pays off, is it quantifiable? According to a study by employment website Glassdoor, the stock prices of companies with high employee satisfaction levels generally outperform those of companies with unsatisfied employees, yielding total shareholder returns 22 percent higher than average.²

Employee engagement has a serious impact on your company's bottom line but with a few small changes, you could see your employees and your organization back in the green.

Sources: 1 ) Employee Engagement: What’s Your Engagement Ratio? Gallup®, 2008-2010.". 2 Calculating the Cost of Employee Disengagement, www.business2community.com.(published online January 14, 2010).3 Maximizing the Return on Your Human Capital Investment: The 2005 Watson Wyatt Human Capital Index Report..