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Why Businesses Haven’t Solved Employee Disengagement

Posted by Ann Roulac on Dec 1, 2021 8:00:00 AM

Ann Roulac

Welcome to another installment from our guest writer, Ann Roulac. We will be featuring her once a month to provide insights into having a purpose-focused business and life.


Research shows that well over half of Americans don’t like their jobs. This not only creates stress among families and communities, but it also poses an immense challenge for businesses. Unprecedented numbers of productive employees have been choosing to resign rather than endure continued burnout from overwork, lack of support, lack of recognition, underpay, and limited or no job flexibility. Turnover rates are rising and the labor pool is shrinking, giving employees more opportunities to leave for new jobs, remote work, or independent contracting careers.

A survey by Korn Ferry in July found that 82% of professionals said they plan to quit their job by the end of 2021. 31% said they’d quit even if they don’t have another job. The Labor Department is tracking the trend and reports that nearly 4 million people quit in July, and 16 million since April – the highest they’ve ever recorded. Higher salary and benefits aren’t the driving factor. Thirty-six percent surveyed said the pandemic allowed them to reevaluate what they want out of work and 32% said they didn’t like their company’s culture. 

Recent Gallup polls indicate:

  • Employee disengagement costs the US economy approximately $350 billion each year.
  • Disengaged employees have 37% higher absenteeism and 18% lower productivity. 
  • 70% of American workers are not fully engaged at work. 
  • 65% of managers are not emotionally or psychologically engaged in their work

The Challenge to Retain Talent

Retaining talent has challenged businesses for years, and the pandemic has only exacerbated the difficulty of doing so. Unforeseen shifts in the business world, like remote work environments, have provided workers the opportunity to reflect on their satisfaction and purpose in their current jobs. As a result, many workers, including some of the most talented, have plans to leave their positions in the near future. The reality is that if businesses don’t begin to address the needs of their employees, they will not only lose money but also face severe labor shortages. 

A recent report published by Blue Board, an employee rewards software platform, states, “losing your best people means losing your reliable winners, your constant innovators and your most effective problem solvers.” And, as Blue Board’s report notes, in a tight labor market, most organizations can’t survive the loss of good people. 

Gallup reports that while the cost of turnover is extremely high, the financial impact fluctuates depending on the individual’s level of seniority. Losing an employee can cost up to two times an employee’s salary. For hourly workers, costs average $1,500 per employee. At the high end, C-suite turnover can cost 213% of an employee salary.

The Cost of Disengagement

For years, we’ve known that increasing employee engagement increases market share and profits. Companies with highly engaged employees are the top financial performers in their industries. These companies benefit from employees who are enthusiastic about their jobs, and whose performance often exceeds expectations. Engaged workers are more productive, ultimately earning more money for their company. Disengaged and stressed employees are causing lower productivity, higher turnover, and lower profits.

ROI of Employee Engagement per Decision Wise Services:

  • Companies with highly engaged employees experience 2x higher net income than companies with poor engagement scores.
  • Organizations with highly engaged employees experience a 7x greater 5-year total annual shareholder return than organizations with less-engaged employees.
  • Organizations in the bottom quartile of engagement scores experience 41% higher turnover.

When productivity and job performance decline, many businesses turn to engagement as the solution. In the twenty years since Gallup first popularized employee engagement surveys, businesses have spent billions trying to improve various aspects of employee experience and increase overall satisfaction. In spite of these efforts, most businesses haven’t figured out how to keep their employees happy and engaged. 

Drivers of Employee Engagement and Purpose

“In a nutshell, happy employees are more productive employees, and more productive employees can seriously boost a company’s bottom line. Employee engagement is so important that it can become your ultimate competitive advantage. When your workers understand how they can contribute to your company and see their efforts in action, they become more motivated and add value to your business.”

Entrepreneur.com, October 2020

We know that companies with highly engaged employees outperform their competition – in revenue growth, product and service quality, customer satisfaction, productivity, and profitability. We also know most employees are not engaged, or not as much as they want to be. According to Glint, a division of LinkedIn that measures employee experience, the top three priorities of employees are to learn, grow, and be challenged; have a sense of belonging; and bring their whole selves to work.

Last year, Glint surveyed HR professionals on their perceptions of their employees and organizations and what they found is troubling: 

  • Only 47% think employee experience is good
  • Only 48% think their organization is “positive and non-toxic”
  • 54% think negative stress is prevalent in their workplace
  • Only 29% say company leaders prioritize employee engagement 
  • Only 21% strongly agree that their employees feel a sense of belonging 
  • 60% see lack of budget as the biggest barrier to improving employee experience 
  • 48% see insufficient support from senior management as the biggest barrier 

Declining employee engagement which has been an issue for years has reached epic proportions. Companies have surveyed employees to find the answers, but little has changed. Employee concerns over confidentiality have led to questions about the credibility of the information. Business owners don’t know what to do with it because they don’t know how to deal with the organizational issues that are raised. Most HR professionals don’t have the bandwidth, experience, or training to effect organizational change.

Business owners with an employee-centered mindset prioritize purpose-focused work. They understand the connection between supporting their employees; the impact it has on the customers they serve; and the success of their businesses. These connections support employees to take pride in their work and provide the motivation to increase performance and productivity. Successful engagement programs teach employees how to prioritize their life goals; create greater work and life balance; and the tools to understand their unique purpose, talents, and contributions. Business owners who take proactive steps now will see their workforce shift from resignation to being excited to come to work every day.

 

If you'd like to learn more about Ann or her company, click here.

 

Topics: employee engagement

 parthiv shah

 

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