42% of staff are disengaged. Do You know how much this is costing you?

42% of staff are disengaged. Do You know how much this is costing you?4 min read

All organisations wax lyrical about efficiency and productivity. This is not a surprising discussion among senior executives in an organisation. However, the solution may just be staring at them in the mirror.  According to our national studies around employee engagement, we found that at least 42% employees would not recommend their workplace to others, while 36% said they would not even recommend their organisation’s products and services.

While employee engagement efforts should ideally be like a pyramid with more effort focussed on staff at the bottom of the hierarchy, our analysis found the opposite result. The higher you are, the more engaged you are. So, for example, senior managers typically tend to be the most engaged, followed by middle management, followed by supervisors, and then the general workforce at the bottom of the engagement list.

As a leader in your organisation, ask yourself: Why is this the case?

Generally speaking the more senior you are, the more self-motivated you are, perhaps it is also because you understand the organisation’s goals and strategies intimately. This in itself drives a person in a leadership role to engage better with their job and the organisation.

But why will 1/3rd of your employees not recommend your products and services?

It can be argued that it’s probably because they have greater knowledge about your brand’s products and services than a general consumer would, and believe it’s not a quality product compared to competitors’. But, perhaps they don’t actually understand the strategy and direction of your organisation, including the benefits of the products or services and how they compare against competitors. In fact, we found that 56% of staff in general do not understand the organizations strategy direction and are not personally committed to making it a success.

This brings me to my next question for you to ponder: Maybe leadership needs to take some time to explain the strategy and direction to its frontline staff, and maybe not enough is being done here?

When we examined our national studies around employee engagement in detail we found quite clearly that all roads ultimately lead to leadership. Engaged Strategy’s study of the Stated Loyalty of engaged and disengaged staff found that engaged employees were 75% more loyal than disengaged staff. This has a direct impact on staff retention, which is an integral aspect of human resource cost management. According to an MIT Sloan research, companies spend about 1% – 2.5% of their annual revenue on new hires before they reach a break-even point and begin to generate revenue for the brand. When attrition is higher or staff are less productive, the cost to company is way more, leading to a lopsided balance sheet.

It is a leadership function to help staff understanding the organisation’s strategy and ignite their personal commitment towards making it successful. It is also important that the leadership provides a clear line of sight between what the staff do and the organisational strategy. Next, in order to keep the level of staff commitment high, it is important that the leadership recognises employee contributions. This makes staff down the line feel valued and supported by the organisation, further enhancing their commitment.

So, when you think about it, the real issue is – what’s the benefit? Where does all this leadership involvement lead you to in the end?  Let’s cover off with what I started off with in terms of productivity and efficiency.

When we measure discretionary effort, we find that while disengaged and passive staff do just their job – as what’s defined for their role – in their 9-5 work time. But the moment an employee is engaged and feels valued by the company, the likelihood of this staff member doing more than what’s expected from the 9-5 routine goes up. In fact, we’ve found in our studies that the discretionary effort with engaged staff is twice as much as the effort with disengaged staff, where the stated loyalty of engaged employees is almost 90%, whereas that of disengaged staff is only 32%.

Unfortunately, there are twice as many staff that are disengaged as opposed to engaged.

This means that though your staff are at work they are not really there. This cannot be good for productivity. In terms of leadership you need regular disciplines and processes. This is not something that you do if have spare time.

So, what should YOU as a LEADER do to drive this change? What TYPE of Leadership style do you need to adopt to turn staff in favour of your business? I’ll cover this off in my next blog.

By |2019-10-16T12:55:10+10:00October 16th, 2019|

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