Employee disengagement is stealing from your company. Each disengaged employee can cost you thousands of dollars a year due to employee turnover, lack of productivity, and absenteeism - or worse, presenteeism. How does disengagement lead to all these things? Let’s take a look.
According to the What’s Working survey from the consulting company Mercer, 50% of employees are not happy at their jobs. 32% of workers are considering leaving their jobs. And if they do leave, that means significant costs to your organization.
First, there are the costs of exit interviews, administrative functions related to termination, and separation/severance pay. Then there are vacancy costs. Finally, there are the costs involved in searching for a new employee and the additional costs of training said new employee.
In an article in the Financial Edge, Annie Mueller explains that even an $8/hour employee can cost a company up to $3,500 in turnover expenses. And the more employee turnover you have, the more these costs will add up.
Another cost that comes from turnover? Lack of productivity. Research has shown that even after a new employee has been hired and trained, it takes time for them to reach the productivity level that their predecessor had. And that means that you might be paying them more than they are earning.
Business advisor William G. Bliss describes that in the first month, productivity is only at 25% – meaning a loss of 75% of the employee’s salary. Within one to three months, productivity will reach 50%. Not until three to five months will an employee reach 100% productivity, finally earning 100% of their salary.
Earlier we talked about the What’s Working survey which found that 50% of employees are unhappy, but only 32% are considering leaving. So what about the other 18%? Those employees are costing you money too, through absenteeism and presenteeism. The health research firm Oxygen Plan Corporation found that stress costs employers $4,888 per employee per year due to absenteeism and health costs. That adds up to a total US economic impact of $400 billion. But not all disengaged employees call out sick a lot. Presenteeism, when an employee is at work but isn’t productive, can cost you even more – and is much more difficult to track.
Where does turnover come from? Simple, it stems from having disengaged employees who are not happy with their jobs. The first step to reducing disengagement in your organization recognizing the problem. What does disengagement look like in your organization? Who is disengaged? Once you start having these discussions you can start investigating the various tools to improve this between rewards, hiring practices and technology, or altering management practices.
Reducing disengagement is not impossible, you just need to start!
Photo Credit: HRHandbook
Author of today’s guest post:
Sean Glass is the co-founder of EmployInsight, a HR technology company that helps enterprise customers use emotional and cognitive resources in their hiring. Before EmployInsight, he was a co-founder of HigherOne which went public in 2010. In addition, he is a graduate of the University of Pennsylvania’s Masters in Applied Positive Psychology Program (MAPP) and attended Yale University as an undergraduate. Follow Employ Insight on Twitter.