Five ways disengagement threatens your business

Man speaking into phone but phone is disconnected
shironosov/iStock
Rob Catalano
Co-founder
WorkTango
Columnist
Share this content

Rob Catalano writes on recognition, engagement, alignment and forward-thinking methods for helping organisations focus on employees to drive business success. He leads global engagement and expansion at cloud recognition and engagement company Achievers. Rob is a Certified Recognition Professional (CRP) and a popular speaker on the HR circuit, having presented on best practices and trends in over 30 cities. His writings include a ‘wisdom of crowds’ approach leveraging his work with hundreds of organisations globally.

Disengagement costs the UK £52-£70 Billion per year in lost productivity according to Gallup. Only 17% of the UK workforce is engaged and 26% of the UK workforce are actively disengaged. This is a higher disengagement level than any other country in Western Europe. 

And what about the remaining 57%?  They’re not really engaged either, feeling no meaningful attachment to their job and/or company.

Now, more than ever, it is important for UK organisations to engage their workforce.  With 2014 annual job vacancies reported at 559,600 in England (up 45% on 2009), and skills shortage vacancies nearly doubling in the same period, a battle for talent is on the horizon.  Recruiting, retaining and engaging talent will be of paramount importance.

Pretty morbid, I know… and although these are UK statistics, this is a global issue.

Yet, so often we talk about employee engagement as a product of annual engagement surveys, or employee happiness, and not enough about the real impact of having a disengaged workforce.  Here are five ways disengaged employees hurt businesses:

  1. They fire customers - 70% of UK consumers will not forgive a business following poor customer service - disengaged employees that provide poor service are essentially firing customers. The Institute of Customer Service shows 78% of the UK’s GDP is derived from the service sector, with 70% of UK employees having direct contact with customers.  Companies must look internally to impact customer satisfaction.
  2. They are not productive – According to a 2012 Towers Watson study, disengaged employees make 100 times the number of errors as their engaged colleagues. That’s 100 times more time, energy and money wasted.
  3. They take time off ‘sick’ - 2.3x more sick days than engaged employees, in fact. In 2013, PwC reported that sick days cost UK organisations nearly £29 billion a year, with UK workers taking nearly double the average number of sick days compared to the US.
  4. They will leave your company - The number one reason employees leave is a lack of recognition and, according to a recent Harvard Business Review study, recognition also has the largest impact on employee engagement.  A recent StepStone survey reveals that 74% of employees rarely, or never receive praise from their managers.
  5. They have a negative impact on profitability - A report for the UK government shows that companies with low engagement scores have operating income 33 percent lower than companies with high engagement.  Additionally, companies with a highly engaged workforce experience a 19% growth in operating income over a 12-month period.

How to triumph over disengagement.

The product of disengagement can get ugly. Your executive team needs to have the following things in mind to start focusing on engaging employees.  

  1. Define purpose – the modern workforce wants more than a paycheque.  If you don’t have a compelling purpose that defines your company, employees will find it elsewhere. 
  2. Be clear on company goals - knowing how an employee’s role relates to overall organisational goals makes them part of the bigger picture. Don’t forget to celebrate success when you get there.
  3. Align employees to company values – having all employees aligned to the values and competencies that define your company is where a great culture starts. Hire to these values and never waver.
  4. Recognise employees accordingly – to see the behaviours you want every day, amplify their importance through recognition.  What gets recognised, gets repeated.

The approaches suggested above match to the top-five most impactful employee engagement drivers identified in 2014 by a Harvard Business Review study entitled The Impact of Employee Engagement on Performance in the image below.

Drivers of engagement

It’s time to rethink your engagement strategy.  The inputs of how employees act and perform every day produces the outputs of successful culture, happy and returning customers, and a profitable business. 

Replies

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.