Employers Group Blog Connection

An Engaged Workforce is Critical to Your Bottom Line

Posted by Nicole Vierzba on Fri, Sep 2, 2011

By:  Charlie Martin, Founder, engagementtoolbox.com

According to current research actively disengaged employees are costing US business over $300 billion dollars annually. These costs appear in absenteeism, turnover, lost productivity, job related accidents not to mention the risk of actively disengaged employees contaminating those who are more inclined toward engagement.

The Gallup Organization has been doing research on workforce engagement for many years including millions of employees and they have chosen to break engagement into the following three categories and definitions:

• Engaged employees work with passion and feel a [profound connection to their company. They drive innovation and move their organization forward.

• Not-engaged employees are essentially “checked out”. They’re sleep walking through their workday, putting in time… but not energy or passion… into their work.

• Actively disengaged employees aren’t just unhappy at work they’re busy action out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish

Other definitions could be applied and there are more available but however workforce engagement is defined by any of the research organizations the message is the same; engagement is critical to the bottom line and disengaged employees are particularly toxic.

Current research indicates that about 30% of the US workforce is engaged, about 16% is actively disengaged and the remainder are in the middle 54% of not engaged and could go either way depending on who influences them or gets their attention.

Some additional interesting statistics from The Corporate Leadership Council:

  • Cost of turnover 

  • Front line employees: 0.41 times annual salary

  • Professional associates: 1.77 times annual salary

  • Managerial: 2.44 times annual salary

Discretionary Effort: In a survey of more than 50,000 employees in 59 organizations across the globe the Corporate Leadership Council found that increased engagement can result in up to 57% increase in discretionary effort and up to an 87% reduction in desire to leave the organization.

As you might guess the degree of engagement can vary based on size of organization, how long an employee has been employed, type of business, age of employee etc. However; these differences are not significant enough to allow any employer to relax about whether their HandsTogether resized 600workforce is engaged or not.

Regardless of all the research and it continues, one of the key issues for any business owner or executive is how the workforce is viewed. It is possible that there are some business owners and executives who view the workforce as a necessary part of the business to get the work done and whatever challenges they bring must just be dealt with. There are other business owners and executive who see their workforce as the core of the business and that every additional ounce of engagement is critically important to the bottom line.

The gold standard of workforce engagement is “Discretionary Contribution”. Any of us that have experience as, or are currently in the roles of, business owners, executives, leaders, or whatever we are called in our position of influence, want to maximize the “Discretionary Contribution” of everyone who works for us. The question is how do we do that? The answer is it’s all about us and our understanding of whom we are and our beliefs about those working for us. More on this topic later. 

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About the Author:
Charlie Martin is the Founder and Head Coach of engagementtoolbox (http://www.engagementtoolbox.com)  Charlie is the author of The Tools of Engagement, a Professional Certified Coach (PCC)  certified by the International Coach Federation and a seasoned leader with over 35 years of experience in a variety of senior level positions in a variety of industries.  He can be reached at Charlie@engagementtoolbox.com.
 

Topics: motivating employees, employee retention, human resources, best practices, retaining employees, rewarding employees