07 Jul The high cost of employee disengagement
All you corporate numbers wonks out there, time to listen up. Here’s something new to stuff into your spreadsheets. The Gallup Organization, a leading international survey research and consulting firm, estimates that “actively disengaged” workers are costing US businesses $300 billion a year in productivity losses! The Gallup Management Journal’s semi-annual Employee Engagement Index puts the current percentage of employees who are actively disengaged at 17%. That’s about 22.5 million US workers. Gallup defines actively disengaged as employees who are not just unhappy in their work, but who are busy acting out their unhappiness by undermining what their engaged co-workers accomplish. Each one of these angry and alienated workers is causing their employers roughly $13k in yearly productivity losses on average. Think this is bad? It gets worse.
A majority of workers (54%) falls into the “not engaged” category. Not engaged workers are defined as “checked out,” putting in time but not energy or passion into their work. Look around you. Chances are every other person you see is on autopilot. Only 29% of workers are estimated by Gallup to be truly “engaged” – i.e., employees that “work with passion and who feel a profound connection to their company.”
These first two numbers add up to a whopping seventy-one percent of workers that are in cruise control and active sabotage mode. While Gallup does not provide any estimates of productivity losses for employees that are merely disengaged, it is a safe bet that these employees are costing companies tens of billions more in missed opportunities for improved innovation, growth and customer satisfaction. The fact that this crisis has gone largely unnoticed is even more shocking given the obsession with productivity improvement that dominates so many corporate management teams. Yet, few companies seem aware of the costs of disengagement because they are hard to see and difficult to measure.
Even if Gallup’s estimates are off a fair bit, they still suggest that a huge crisis exists in American corporations today. What is causing 7 out of 10 workers to be apathetic toward or totally disengaged by the workplace? According to Gallup, the main culprits are – SURPRISE – bad managers. Their data suggests that those in the actively engaged category are extremely satisfied with their managers while the disengaged and actively disengaged workers are very unhappy with their leadership. They conclude from this that a lack of good management is turning off workers in droves.
What’s behind the epidemic of bad managers suggested by the Gallup study? One root cause that creates and sustains bad managers is dysfunctional organizational cultures that often reflect the failings and foibles of the executives at the top. Many HR professionals and senior executives seem to want to ignore this reality. They would like to believe that solving the problem is simply a matter of weeding out a few atrocious first-line managers and providing training and support to the others. But without changing the behaviors of the leaders of the organization that drives the rest of the culture, bad management practices will inevitably creep back. Yet taking on the leaders of the company is something that few HR executives feel capable of doing on their own. Instead they seek to do what they can to improve employee engagement and performance while working within the constraints imposed by the prevailing dysfunctional organizational culture.
But HR executives must be prepared to speak truth to power. They should take every opportunity to make their leaders aware of the costs and causes of poor management. Indeed, the next time a leader of your organization demands to be shown evidence of the contribution of HR to the bottom line, hand them a copy of the Gallup study. While you may not be able to easily measure the positive impacts of impassioned workers on your company’s bottom line, you can show hard quantitative evidence of the productivity losses that result from poor managers and the disengaged employees they create. These numbers will not only get the attention of your leadership, they should be enough to start a productive dialogue with them about the root causes of the problem and the role they need to play in correcting them.
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Tony DiRomualdo is a business researcher, writer, and advisor with Next Generation Consulting. He works at the intersection of people, business strategy, and information technology to help companies create a committed and high performance workforce. Tony can be reached at td@nextgenerationconsulting.com.
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