Why Employee Engagement Has a Direct Impact on Your Business Bottom Line

[ Return to Our Blog ]

bored employeeGallup’s State of the American Workplace Report for 2012 cited a disturbing trend in the workforce. Nearly 70 percent of employees were not actively engaged in their work. These employees cost employers approximately $500 billion in lost work, money, and time every year. This isn’t just affecting large companies – small companies and start-ups can acutely feel the effects of disengaged employees.


Disengagement Costs Money

There is no denying that disengaged employees have a direct – and negative – impact on your business bottom line. There are a number of reasons that disengagement is costly:


  • Disengaged employees care less about their jobs than engaged employees.
  • While engaged employees have a vested interest in seeing their projects and careers advance, a disengaged employee is looking for the exit at best and planning on minimal effort indefinitely at worse.
  • Disengaged employees have more absenteeism, experience more safety incidents, and create more turnover within the company.
  • The cost of overtime to cover illness, training new employees, and worker’s compensation adds up over time.


Active Disengagement Costs More

Disengagement is bad enough, but did you know there are 20 million employees (making up approximately 18 percent of the American workforce) that are actively disengaged? Actively disengaged employees are those that are not just unhappy at work – they act out on that unhappiness and actually undermine the productivity of otherwise engaged employees.


Actively disengaged employees purposely siphon off employer time and resources. They cost the company by taking more managerial time, contributing to shrinkage, and creating more quality problems than would otherwise exist. This small piece of the workforce can undo the work of an actively engaged employee, and therefore addressing the underlying issues causing active disengagement is a pivotal part of a risk management strategy to reduce waste.


Lack of Engagement Kills Morale

Actively disengaged employees cause disruption and dissatisfaction within the company. Even actively engaged employees can experience decreased morale if the overall team’s level of engagement falters. Just a few actively disengaged employees can have a net negative effect on the work place.


Engagement Increases Productivity

It’s no coincidence that employees that scored highest on employee engagement produced more work and  earned more money for their company. An actively engaged employee earns more and uses fewer resources than a disengaged employee. Engaged employees even use less health care. Employee engagement isn’t some lofty goal, it’s a pivotal checkpoint a successful company must attain to continue their success.


Disengagement Affects Customers

Employee discontent doesn’t stop at the front lines of business. Customers sense and respond to unhappy employees. Excellent customer service drives repeat business and brand loyalty. An engaged employee actually creates new bonds with customers and fosters repeat business. Their enthusiasm and pride in their work increases customer satisfaction. This link between employee engagement and customer satisfaction is important to keep in mind when assessing employee engagement scores.


Many Disengaged Employees Have an Excuse

Simply letting disengaged employees go is a false solution. The fact is, many of these employees have legitimate reasons for their disengagement and it is management’s responsibility to address these reasons. In the Gallup study, the biggest reason most employees felt dissatisfied in their current position was a lack of training or room for promotion. Employees don’t feel as though their personal development is an important factor for their company.


Companies that engage employees by providing training either as education or as a route to a new career can create a stronger feeling of loyalty within their employees. While this may not elevate a disengaged employee to an actively engaged employee, it will cut down on overall loss of resources and business, and ultimately help to fuel company growth.


Employee engagement may seem like an unimportant concept but it has a very real effect on a company’s bottom line. For better productivity, customer satisfaction, and profit, cultivating engaged and driven employees is a must. Disengagement is a drain on resources and time that can’t be allowed to fester in today’s economy for companies of all sizes.


Image credit: Syda Productions / Shutterstock.com


Contact Us

For more information, contact us today! Our Risk Advisors and Employee Benefit Consultants are available to answer any questions you may have. We look forward to working with you!


For the latest updates on pending legislation, emerging risks and other vital issues that impact your business, subscribe to our Risk Advisor & Benefits Advisor newsletters.


Find an upcoming Loss Prevention Seminar near you! View our full schedule of Loss Prevention Seminar topics for information about our Loss Prevention Services.

Learn more about how Tolman & Wiker helps our clients succeed by lowering their total cost of risk:
Our Process | Performance Based Insurance

Blog Topics: [ Employee Benefits ] [ Health & Wellness ] [ Property & Casualty ] [ Risk Management ] [ Leadership ] [ Security ]

Blog, Risk Management | No Comments

Comments are closed.