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The enormous cost of disengaged employees for the organization

21 March, 2022
5 mins

There are only a few issues that can be disheartening and frustrating for you than your employee getting disengaged with your organization. A team member who’s last their spark due to one reason or another can bring down the entire team. Moreover, it feels like a personal failure for the leaders and managers. Employee disengagement is a personal subject, but it is also a universal one, for which organizations have been bearing enormous financial costs. 

One of the key metrics for establishing a top-performing and successful organization is to have high levels of employee engagement. The term employee engagement implies the emotional commitment your employee has towards your business. It’s a measure of the extent to which they feel committed, loyal and passionate about the roles they perform, how obliging they are to collaborate with their colleagues, and how viable they are to contribute discretionary effort for achieving the common objectives of the organization and drive it towards success. Long gone are the days when employee engagement was considered to be a mere intangible and immeasurable HR notion. It is now globally accepted as a fundamental driver for motivation, productivity, and commitment in the workplace.

disengaged employees for the organization

Source: pexels

Although, the extent of the direct financial costs that organizations bear as a result of having a disengaged workforce is often underestimated. The majority of corporations often find it difficult to put a number on the amount of money their business is losing through employee disengagement and hence struggle to justify investments in employee engagement tools. As per the research done by Deloitte, American companies spend more than $1 billion annually on boosting their employee engagement in the form of programs, initiatives, and surveys. While it is only the tip of the iceberg when one considers what disengagement costs organizations in the form of lost productivity and turnover. So, in order to give you a better understanding let us now look at what disengaged employees are, how much they cost your business and how you can help your disengaged workforce. 

What are disengaged employees and how much do they cost your business?

A disengaged employee can be defined as one whose mindset, willingness, and quality of work have all come down the cliff. Make sure to remember that a disengaged employee is way too different from a merely bad employee or some individual that has been apathetic since their first day. Disengagement represents a loss in motivation and satisfaction, but what it may appear to be can vary from one employee to another. A high-performing employee may still perform fine when disengaged, but they’ve reached a point where they’ve stopped growing and are not living up to their potential. 

The cost of disengaged employees is nothing short of staggering, even though the majority of them remain hidden. As informed above, American organizations spend over $1 billion directly on engagement and more than $100 billion on activities related to training and development. In addition to this, the cost of disengagement can also be gauged in terms of productivity and turnover. Your disengaged employees are extremely likely to seek employment elsewhere, which will bear enormous costs on your organization. Employee turnover is said to range from 75% to 150% of the annual salary. Then there’s productivity. As a leader, you must have noticed that disengaged employees are more likely to commit costly errors and tumble the ball for your customers. Gallup estimates that organizations that have high levels of employee engagement yield 20% more productivity, 21% more profitability, and 10% more customer loyalty than the ones with disengaged employees. 

Turnover and productivity can be regarded as quantifiable metrics. Though what is less visible is the lost potential. When an organization has disengaged employees, it has a workforce that no longer collaborates and shares knowledge. They are not motivated enough to bring up new ideas and relevant feedback that can raise the efficiency levels of your teams and organization. They no longer seek out opportunities for developing and growing, so it becomes almost impossible to establish a successful organization. 

How leaders can help disengaged employees 

Organizations go beyond their budgets and limitations to boost their employee engagement, but it is not the kind of issue that can you just throw your money at. Addressing employee disengagement demands consistent, personalized investment from the ones sitting above. 

Inspire thyself

It is found that the organizations that have a disengaged workforce have managers and leaders that are neither passionate nor engaged. This should go without saying, but if you as a leader cannot model eagerness, you cannot expect to see it in your team. Redouble your commitment to your team’s and organization’s success and to improve your organization’s culture. You’d be surprised with how rapidly the levels of your employee engagement increase. 

Address the issue head-on

If you notice the tell-tale signs of disengaged employees, don’t keep sitting in the hope that it will go away on its own. Have a meeting with them and ask for their concerns. However, it is crucial that you are curious and not accusatory. Ask questions that will tell you about what is missing in their work-life and what you can do to provide it. Sometimes, disengagement can be a brief dip from which employees recover so make sure you don’t overreact. 

Recognize their achievement

It is very difficult to have engaged employees if ignore their achievements. If your employees feel challenged but not supported enough, they might become disgruntled and not engaged. So it is important for you to celebrate and acknowledge their small wins – both in private as well as in front of their teams. Well-earned praise from managers can increase the happiness quotient of team members and just as importantly it serves as a reminder for them that they matter. When you connect their success to the success of the team and the company, they will be more invested in both. 

Employee engagement tools have been in popular demand as organizations have finally realized that disengaged employees hamper the growth and functioning of the organizations in multiple ways. Contact us today to boost the engagement levels of your employees straightaway!