Disengaged employees cost your organization money – but how much, and where does it show? Here are several areas where you can, and should, measure these costs.
Disengaged employees do less work per day; they waste time by procrastinating or griping. An outside firm can survey your workforce, anonymously, to determine the level of engagement. One example: in 2008 Staffing World reported that, on average, American workers wasted 2 hours in each work day. To annualize this, multiply those lost hours by the number of working days in a year (about 200 days). To determine the annual cost, multiply that by the number of employees, times the average hourly wage in your organization. Another approach to this calculation is to determine the wasted fraction of a work day. In the Staffing World report, this would be about 2/8 hours, or about ¼ of the work day. Multiply that by your organization’s annual payroll: was 25% of your payroll wasted last year?
Disengaged employees accomplish less with the opportunities they encounter. It may be most obvious in a sales organization. Will the employee make the extra cold call? Push for a closing date? Check back on customer satisfaction? Disengagement may be as easy to measure as a loss in year to year sales.
Disengaged employees do not initiate or innovate. They become satisfied to do the same old things in the same old ways. This is an obvious problem in a marketing organization, where it is critical to attract new customers by generating new campaigns. But most very successful organizations thrive on employee suggestion programs, where front-line workers contribute to improvements on the assembly line, to innovations in products, or to streamlining processes.
Disengaged employees are more likely to resign or to be terminated. They resign because they hope to have more fulfilling careers elsewhere. They are terminated because their performance did not measure up. What did your organization spend on severance payments last year? Were those disengaged employees? Consider the lost productivity from the time an employee resigns to the time the replacement worker becomes a fully functioning member of the team. Ask your Human Resources department what it costs to recruit, background-check, interview, and finally hire an employee. Then annualize the cost: how many employees were hired last year?
Disengaged employees lead to disengaged customers. Your organization is a rare and endangered species if it does not depend on repeat business. Your organization also benefits from favorable word-of-mouth to attract new customers. Your customers will notice poor or slow service; lack of attention to detail; or anything that says “I don’t care”. Have you lost customers due to intangible issues? Has the number of customer referrals gone down, over the last year? What did that cost your organization?
Now more than ever, organizations should be investing in surveying their employee engagement. Find out why your employees are disengaged. Are they in the wrong job? Are they not sufficiently challenged? What would re-energize them? Find out and do something about it today. The results could re-energize your company's bottom line.
Authors: Tricia Neves and Gary Sorrell – copyright protected worldwide. All rights reserved.
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Sincerely,
Tricia Neves
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