WageWatch Ibrief Blog

Login

ENGAGED VERSUS DISENGAGED EMPLOYEES—WHAT IS THE COST?

Employee Engagement

Employee engagement levels are at their highest in years.  The Gallup Organization has been measuring levels of employee engagement since 2000.  Over nearly two decades, the annual percentage of actively engaged U.S. employees has ranged from a low of 26% in 2000 to the recent six-month high of 34% in 2018.  On average, 30% of employees have been engaged at work during the past 18 years.  Conversely, the percentage of actively disengaged U.S. employees has ranged from a high of 20% in 2007 and 2008, during the heart of the recession, to the current low of 13%.   On average 16.5% of U.S. employees have been actively disengaged over 18 years of tracking.

To better understand employee engagement levels, it helps to understand how Gallup categories the three different segments of employee engagement.  “Engaged” employees are involved, enthusiastic, and committed to their work while “actively disengaged” employees are unhappy at work and aren’t afraid to tell others about it; they are resentful that their needs aren’t being met and act out, potentially undermining co-workers.  The biggest group of employees are those “not engaged;” they are unattached to their work and while putting in the time, there is no energy or passion put into their work.  To summarize, the 2018 Gallup survey results categorizes employees as:

  • Engaged = 34%
  • Not Engaged/Disengaged = 53%
  • Actively Disengaged = 13%

What is the cost of unengaged employees to an organization?  Gallup indicates that an “actively disengaged” employee will cost their organization $3,400 for every $10,000 of salary, or 34%.  For example, if an average salary is $60,000 per year, the cost for each disengaged employee is $20,400 ($60,000 x .34).  For a company with 1,000 employees, 13% are actively disengaged, for a total of 130 employees.  In this example, the total annual cost to the organization is $2.65 million (130 employees x $20,400).  This monetary loss to the organization is only for the actively disengaged employees and does not represent the loss among employees who are in the “disengaged” (53%) segment.  However, it is compelling to understand the cost for the most “actively disengaged” employees, knowing that the cost of total employee disengagement would be higher.

After computing the cost of disengagement, the focus shifts to increasing engagement.  Based on attributes measured by Gallup in their employee engagement survey, employees place the greatest importance on a role and organization that offers them:

  • The ability to do what they do best
  • Greater work-life balance and better personal well-being
  • Greater stability and job security
  • A significant increase in income
  • The opportunity to work for a company with a great brand or reputation

How do organization increase engagement within their organization?  Some time-tested methods include the following:

  • Develop great managers, they have a tremendous impact on their employee’s experience within your organization. Build a strong manager development program to ensure employees have great bosses.
  • Managers need to schedule on-going career conversation with their employees. Statistics demonstrate that employees want to have career conversations with their boss; it shows the employee that someone at work encourages their development.
  • Build a learning/development culture—one of the primary reasons employees leave a job is to gain career development. Building a learning culture demonstrates to employees that the organization cares about their personal development and that there are advancement opportunities for them within the organization.
  • Allow greater flexibility in the work environment. In 2016, the Gallup survey measured that 43% of employees worked remotely in some capacity.  The findings demonstrated that engagement climbs when employees spend some time working remotely and some time working in a location with their co-workers.  The greatest return exists when employees maintain some balance:  working remotely most of the time but still getting face time with managers and co-workers.
  • Prioritize and demonstrate diversity and inclusion at levels. If employees feel unwelcome they are less likely to care about their position.

For an organization to prioritize increasing employee engagement, it is important to develop an ongoing measurement of engagement. To better understand the specific tactics that will increase engagement within your organization, measure engagement through employee surveys to determine what works and doesn’t work at your organization.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data, and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is a custom-built survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

This entry was posted on Wednesday, January 30th, 2019 at 3:15 PM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.