Did you know that low employee engagement costs the United States economy $370 billion per year? That’s a staggering number, and it’s a problem that needs to be addressed. In this blog post, we will discuss the cost of low employee engagement and what businesses can do to improve things. We will also look at some of the benefits of high employee engagement. If you’re interested in learning more, keep reading.
What Is Low Employee Engagement?
Employee engagement is a measure of how enthusiastic and committed employees are to their jobs, organizational goals, and company culture. Low employee engagement is a problem because it leads to apathy, absenteeism, presenteeism, high turnover, and low productivity.
There are also financial costs associated with low employee engagement. A disengaged employee is less productive, and this costs the company money. In addition, companies with high turnover rates spend more money on recruiting and training new employees. It can also negatively impact the company’s reputation.
What Causes Low Employee Engagement?
There are many factors that can contribute to low employee engagement. Some of these include:
-A lack of clear goals and direction from leadership
-A feeling of being undervalued or unappreciated
-An unclear or unrealistic job description
-Ineffective or nonexistent communication from leadership
-A lack of opportunities for growth and development
-A hostile or toxic work environment
How Much Does Low Employee Engagement Cost?
The cost of low employee engagement is difficult to quantify because it manifests in many different ways. However, some estimates put the cost as high as $450 billion per year in the United States alone. This number takes into account lost productivity, higher health care costs, and increased absenteeism
There are also indirect costs associated with low employee engagement. Some of these costs are:
Direct Costs
There are many direct costs associated with this low employee engagement. Some of these are:
Health Care Costs
Health care costs are one of the most direct costs of low employee engagement. Disengaged employees are more likely to have chronic health problems, mental health issues, and substance abuse problems. These health problems lead to higher health care costs for the company. There are also indirect costs associated with health care, such as lost productivity due to absenteeism.
Mental Health Costs
Mental health problems are another direct cost of low employee engagement. Disengaged employees are more likely to experience anxiety, depression, and stress. These mental health issues can lead to absenteeism, presenteeism, and turnover. In addition, mental health problems can impact an employee’s ability to perform their job effectively.
Substance Abuse Costs
Substance abuse is another direct cost of low employee engagement. Disengaged employees are more likely to abuse alcohol and drugs. This can lead to absenteeism, presenteeism, accidents, and errors. Substance abuse can also lead to higher health care costs and increased workers’ compensation claims.
Indirect Costs
In addition to the direct costs, there are also indirect costs associated with low employee engagement. These costs include:
Lower Quality of Work
There are some studies that suggest that disengaged employees produce lower quality work. This lower quality of work can lead to errors, customer complaints, and product defects. It may also mean that the company has to spend more money on quality control.
Bad Company Reputation
Low employee engagement can also lead to a bad company reputation. This is because disengaged employees are less likely to be satisfied with their jobs. They are also more likely to tell others about their negative experiences. A bad company reputation can make it difficult to attract and retain talent. It may also lead to lower sales and revenue.
Increased Absenteeism
Disengaged employees are more likely to be absent from work. This absenteeism can lead to lost productivity and increased costs for the company. There are also many indirect costs associated with absenteeism, such as missed deadlines and customer complaints.
Decreased Productivity
Disengaged employees are also less productive when they are at work. This decreased productivity can lead to lost revenue for the company. These are also indirect costs that can have a ripple effect on the company.
Opportunities Cost
In addition to these direct and indirect costs, there are also opportunity costs associated with low employee engagement. These opportunity costs include:
Lost Revenue
When employees are disengaged, they are less productive. This decreased productivity can lead to lost revenue for the company. These opportunities cost also extend to missed sales, lower customer satisfaction, and increased churn. It may also lead to higher costs for marketing and advertising.
Increased Turnover
Disengaged employees are more likely to quit their jobs. This turnover can lead to increased costs for the company, such as training and recruiting new employees. It may also lead to lost productivity and decreased morale. This opportunity cost can have a negative impact on the company’s bottom line.
Missed Opportunities
Another opportunity cost of low employee engagement is missed opportunities. Disengaged employees are less likely to be innovative and take risks. This means that they are less likely to come up with new ideas or products. As a result, the company misses out on potential revenue.
Lower Sales
Disengaged employees are also less likely to be satisfied with their jobs. This dissatisfaction can lead to lower sales for the company. There may also be opportunities cost associated with lower customer satisfaction and increased churn.
Missed Deadlines
Absenteeism and decreased productivity can lead to missed deadlines. This can impact the company’s ability to meet customer demands. There are also many indirect costs associated with missed deadlines, such as lost productivity and customer complaints. It may also lead to higher costs for marketing and advertising.
The high cost of low employee engagement is clear. There are many direct and indirect costs associated with this issue. In addition, there are opportunity costs that can have a negative impact on the company’s bottom line.
How To Manage Cost of Low Employee Engagement?
To manage, these low engagement costs, employers should consider the following:
-Develop an engaging workplace culture
Culture is key when it comes to engagement. Developing a positive workplace culture will help to encourage employees to stay with your company and feel proud to be part of it. Consider what values and behaviors you want to promote in your organization and make sure these are communicated clearly to everyone. Encourage employees to share their ideas on how they can make the company culture even better.
-Invest in employee development
One way to keep employees engaged is by investing in their development. Show them that you are willing to invest in their future with the company and they will be more likely to stick around. Offer opportunities for training and professional development, as well as mentorship programs.
-Create a positive work-life balance
Another way to keep employees engaged is by creating a positive work-life balance. Make sure they have the opportunity to take vacations, sick days, and personal days when they need them. Encourage them to take advantage of flexible work arrangements so they can better manage their time.
-Recognize and reward employees
Finally, don’t forget to recognize and reward employees for their hard work and dedication. A little appreciation can go a long way in keeping people engaged with their job. Consider offering bonuses, spot awards, or another recognition program to show your appreciation.
By implementing these strategies, you can help to reduce the cost of low employee engagement in your organization.
Conclusion
Employee engagement is critical to success in any organization, yet many companies continue to struggle with low engagement levels. The costs of low employee engagement are high and can have a major impact on profitability, productivity, and turnover. While there is no one-size-fits-all solution to improving employee engagement, there are a number of steps that companies can take to make it a priority within their organization. By taking the time to invest in employee engagement, companies can reap the benefits of a more motivated and productive workforce.
Mantra Care is a platform that helps you to find the perfect employee engagement challenges for your employee’s needs. With Mantra Care, you can customize your challenge, set reminders, and track your employee’s progress. Sign up today and start improving your health.
A Word From MantraCare Wellness
Employee wellness programs are the key to improving employee motivation, productivity, and retention. At MantraCare Wellness, we have a team of health experts, counselors, and coaches who serve corporate employees with 10+ wellbeing programs including EAP, Employee Diabetes Reversal, Corporate MSK, PCOS, Employee Fitness, Corporate Yoga, Employee meditation, and Employee Smoking Cessation.