The Hidden Costs of Neglecting Employee Engagement

Employee Engagement is the emotional commitment that employees feel toward their organization that causes them to apply additional discretionary effort to their work.

If you’re not intentionally nurturing an emotional commitment, you’re missing out the benefits that come when employees apply additional discretionary effort. 

Are You Neglecting Employee Engagement as a Business Strategy?

Studies reveal that most employees are not fully engaged.

• 51% of the U.S. workforce is not engaged. (Gallup)

• Only 16% of workers in the US are “fully engaged” (Modern Survey)

• 23% of employees are "Disengaged" (Modern Survey) and 16.5% are “Actively Disengaged” (Gallup).
  
  

Neglect is one of the reasons for such high levels of disengagement. Too few organizations focus attention on employee engagement tracking, metrics, and accountability. Too few managers know what it takes to engage employees or why doing so is a vital part of their job. Even fewer organizations provide training, coaching and tools for managers so they can improve engagement levels.

If employee engagement is not a prominent part of your people practices and strategic plan, chances are that you’re neglecting it and missing out on a whole host of benefits.   

What Are the Benefits of Employee Engagement?

Contrast the impact of low engagement with the benefits of high engagement levels. The benefits could not be clearer or more compelling.

• Disengaged employees cost organizations between $450 and $550 billing annually (The Engagement Institute).

• The attrition rate of disengaged employees is 12x higher than highly engaged employees over the period of a year (Glint)

• Highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity (Gallup)

• Highly engaged business units achieve a 10% increase in customer ratings and 20% increase in sales (Gallup)

• Organizations that have over 50% employee engagement retain over 80% of their customers (DemandMetric)

• Companies with engaged employees see 233% greater customer loyalty and a 26% greater annual increase in revenue (Aberdeen)

• Companies that double the rate of engaged employees achieve, on average, 147% higher earnings per share than their competition (Gallup)

• Highly engaged business units result in 21% greater profitability (Gallup)

Next Steps for Increasing Employee Engagement

Belief in senior leadership is the strongest engagement driver; growth and development is the second highest driver (Modern Survey).

People are more likely to believe in senior leaders when they know or understand them. In evaluating your next steps, consider these important questions:

1. How connected are senior leaders to frontline contributors? Are they visible, accessible, approachable, and available to employees at every level? Or are they isolated and remote, mysterious icons who are unknowable and unreachable?

2. Do senior leaders have a clear Philosophy of Leadership that has been crafted and clearly communicated to others? Or do employees have to assume, guess, and wonder what senior leaders stand for?

3. Are the behaviors of senior leaders consistent and predictable? Are they aligned with the values of the organization?

4. Do senior leaders have leadership development or merely management experience? The behaviors of leaders are directly linked to employee engagement. Do leaders in your organization know what those evidence-based, engagement-driving behaviors are?

5. To foster workplace connections and belief in senior leadership, do senior leaders receive soft skills development and executive coaching? Or is their functional expertise expected to command authority and respect?

When there are low levels of engagement, it’s best to look first at the highest levels of your organization to diagnose the problems and implement changes.