How much are your disengaged employees costing your business?

The rate of (dis)engagement

The majority of workers in the U.S. are not engaged and this is costing businesses a heavy toll.

According to research done by Gallup in the State of the American Workplace report, the majority of employees in the U.S. workforce are not engaged and have not been for some time.

Let’s take a look at the numbers.

Only 33% of U.S. employees are actually engaged at their job. The remaining: 51% are not engaged and 16% are actively disengaged.

These numbers scale when looking at the majority of worldwide employees, where 67% of employees are not engaged.

Today, millennials account for 38% of the U.S. workforce. Of these, only 29% of them are engaged — leaving a whopping 71% of general disengagement.

How does disengagement affect your business?

Disengaged employees have higher absenteeism rates, lower profitability rates per employee and lower productivity than engaged employees.

Businesses are paying a high cost for low employee engagement rates. The question is, how much?

How much are your disengaged employees costing you?

The numbers can be alarming. When taking these rates and translating them into dollars, you’re looking at a cost (or loss) of approximately 34% of a disengaged employee’s annual salary.

Let’s do the math together.

The average annual salary in the United States is $47,060 per employee. 34% of that: $16,000. That is a cost of $16,000 per year per a single disengaged employee (that is, in most cases, entirely preventable.)

Across the U.S., the numbers show the massive effect disengagement has on the work economy. The Gallup survey estimates that actively disengaged employees cost the U.S. roughly $480 billion to $600 billion each year.

What do these masses costs include? Lost productivity, low profitability and expensive turnover rates.

The more disconnected employees feel, the more likely they are to jump ship. Replacing employees, looking for new help and hiring new staff is an expensive and costly process.

Moreover, as any manager knows, turnovers include numerous, additional costs that aren’t numbered on the expense reports. Losing good and quality employees can break down team morale and can be extremely time consuming and energy-draining for any company.

The benefits of engaging employees

It’s one or the other. When employee engagement rises, turnover rates decrease drastically.

Higher employee engagement produces higher productivity levels, higher profitability per employee and higher sale rates.

Accompanied with these benefits are drastically lower absenteeism and lower turnover rates, as well as major decreases in incidents involving safety and work accidents.

The likelihood of success of a business increases statistically with above-average employee engagement.

How can you engage your team?

Investing in employee engagement and taking strategic actions makes it more likely that employees will have above-average productivity and result in the better for all players— employees, employers and the business as a whole.

1. Acknowledging is the first step.

Creating a better work environment is not an easy task. Businesses that already acknowledge the problem and commit to make a change are already taking a major step forward that other companies are not.

Employees that see verbal and active acknowledgements regarding issues, changes or improvements in the workplace will feel part of a more welcoming and secure environment.

2. Managers are the secret to success.

Companies need to use their strongest hand when it comes to successful engagement — managers.

Managers arguably play the most significant role when it comes to promoting employee engagement. Managers and operational leaders are the ones affecting team motivation, creating the level of accountability and determining the method of communication.

When managerial expectations are clear and managers provide adequate job details and resources, the workforce runs smoother and remains engaged.

3. Flexibility and stability are key factors.

Businesses that promote flexible schedules and hours, as well as an easy way for employees to access work schedules and shifts see an increase in their employee engagement and satisfaction.

It is important that there be a balance between a flexible work schedule in an organized, stable fashion so that employees are kept up-to-date and have all essential information at hand.

4. Optimizing communication between all players.

Companies that can optimize employee management and communication will improve internal efficiency, client satisfaction and employee engagement.

Some good ideas include investing time in team building and building relationships between managers and employees. Consider a form of open communication and creating an easy way for employees to interact, ask questions and speak with managers. Managers should provide an easy way to update and stay in contact with employees.

5. Integrating technology to engage employees.

Using an employee management tool or mobile app has been shown to dramatically boost the flow of communication, the ease of management and employee engagement in the workplace.

When mobile apps are used by operational managers and leaders to distribute essential or day-to-day information pertaining to the job, provide guidance and respond swiftly, customer satisfaction rises dramatically. There is a direct correlation between the increase in customer satisfaction and increase in revenue.

The transformation of the way businesses manage their workforce can determine the growth and success of a business. In face of the changing landscape of the modern workforce, insights into internal business engagement can help businesses build a new method of employee management and communication.

Ubeya is the all-in-on workforce management platform connecting employers to their business, their clients and their employees.