The Cost of Disengaged Employees
Gallup defines employee engagement as ‘the involvement and enthusiasm of employees in both their work and workplace’. The measure of your employee engagement represents how your employees are feeling, developing in, and thinking about their jobs.
Research has shown that disengaged employees cost the UK £44 billion annually in lost productivity (Employee Benefits Summit 2010). The Perkbox ‘Financial Cost of Disengagement’ calculator estimates that disengaged employees are costing the UK economy £340 billion every year in lost training and recruitment costs, sick days, productivity, creativity, and innovation.
Engaged employees are more productive, satisfied, and likely to stay with an organisation for the long term. Understanding the level of engagement within your workforce is essential for creating a positive work environment and fostering a culture of continuous improvement.
Gallup’s 2023 State of the Global Workplace survey found that only 23% of the global workforce is engaged and 59% are quiet quitting. In the US and Canada, engagement is 31%, Europe 13%, and the UK 11%.
Gallup’s research also shows that disengaged employees have a 37% higher absenteeism rate, 18% lower productivity, and 15% lower profitability. This equates to a not engaged employee costing an organisation at least 18% of its annual salary.
UK Company Example
According to the Office for National Statistics, the average salary in the UK in 2023 was £34,963. Let’s say you have 50 employees and 30% of your workforce is disengaged. Disengagement could be costing your organisation £94,400 per annum.
It is worth doing this exercise with your average salary and levels of disengagement within your team to better understand the cost of disengagement within your organisation.
4 Tips to Improving Employee Engagement
Conduct an independent employee engagement survey: Giving your employees a voice, identifying your baseline and prioritising areas of improvement will set you on the right track.
Train managers to be great people managers: Gallup believes that 70% of the variance in team engagement is down to the manager. Most managers have been promoted because they were good technically, but they need to be supported with the soft skills required to be effective as a people manager.
Clarity on Purpose: Regularly communicating and getting the team excited about your organisational purpose is an essential element of employee engagement. Employees who live their purpose at work are more productive.
Culture and Values: Defining a clear set of values with the team and agreeing on behaviours linked to the values will help everyone understand what is important in your organisation and what new employees can expect.
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