The Cost of Disengaged Employees

communication disengaged employee engagement employee engagement statistics employee engagement strategies employee experience employee happiness employee retention employee satisfaction leadership culture leadership development proactive leadership profit profitability profitability killers recruiting return on investment May 23, 2023
employee engagement statistics

Once we’ve been intentional about creating a culture of top-down leadership that provides effective communication on an ongoing basis and we’ve worked to minimize the profitability that’s killed by high voluntary turnover and ongoing recruiting, the next - but certainly no less critical - profitability killer that needs our attention is the cost of disengaged employees. To have any real shot at doing that, we need to have a firm understanding of how widespread this issue truly is, how it impacts individual performance, and how each of those things ultimately affect even the best members of our teams…

Before digging into any of that though, let’s make sure we’re on the same page; I’m not suggesting we do everything we possibly can to make our employees happy nor do I believe that we can get long term results by simply working to ensure employee satisfaction. Employee engagement is very different from either of those things. In fact, an article I found on called How to Increase Employee Engagement that differentiated the three like this:

Employee engagement is a measurement of how committed an employee is to their employer, how passionate they are about the work they do and how well their personal goals and values align with the mission and objectives of their employer.

An engaged employee is enthusiastic about working with customers and providing them services that generate profit and a good reputation. Not only that, but if your company has an engaged workforce, you’re more likely to retain your current staff — instead of having to frequently spend time and money hiring new employees.

It’s important not to confuse employee engagement with employee satisfaction. While the two may sound similar, they’re actually two different concepts. A satisfied employee is someone who likes their job and feels their employer meets their needs, while an engaged employee is someone who is committed to their work, dedicated to their employer and consistently performs at a high level.

An engaged employee is always satisfied, but someone can be satisfied without being engaged. For example, an employee may be happy with the compensation and job duties, but they may not be emotionally connected to their work or loyal to their employer.

With that perspective in mind, we need to understand just how widespread the lack of engagement is. Over the decade or so that I had hands-on involvement with doing employee engagement surveys, the message that was most frequently shared with me was that the best organizations in the world had only about 20% of their workforce that was actively disengaged and around 30% of their team was actively engaged. The analogy I’ve used most often to describe this has been one with ten folks in a row boat; the three at the front are rowing just as hard as they possibly can to get to the destination, and there are two in the very back who are working just as hard to sink the boat. In the middle, however, we still have five folks who may or may not be holding oars but they’re certainly not breaking a sweat in their rowing efforts…

A recent Forbes article called Why The Latest Engagement Statistics Are Unacceptable, shared a numbers from Gallup’s “State of the Global Workforce” 2022 report in a very similar manner:

Imagine out of 100 people in your business:

  • 21 people are powerfully rowing toward your company goals.
  • 19 people are actively rowing against them.
  • 60 people are just along for the ride, creating drag for those who are rowing forward.

While it’s a little tougher to imagine a row boat that fits 100 people, it still paints a vivid picture. And whether we’ve got that world-class 30% rowing or just the 21 referenced in that recent study, there’s still a whole bunch of folks weighing down the boat that aren’t doing much to contribute!

Fortunately, Gallup offered a solution to this crisis; “The real fix is simple: better leaders in the workplace.” By this point, you know I’m a fan of simple so we’ll work through some steps we can take as leaders to build the engagement we need in our organizations. Before doing that, I believe we should attach some dollar signs to this thing called engagement so we have a clear picture of how much profitability disengagement really is killing as well as the effect even the 19% who are actively disengaged can have on everyone else around them. Stay tuned!