Is your business taking a lack of employee engagement seriously enough? Well, the evidence suggests most organizations are failing on the employee engagement front. Gallup’s latest report on the State of the Global Workplace reveals only 20 percent of workers are engaged. However, far from being an add-on that makes everyone feel warm and fuzzy, employee engagement impacts where it counts – profits. There is a definite connection between recruiting talent, engaging that talent, and achieving positive business results. Aligning business strategies with a program of employee engagement is a best practice initiative top companies globally implement. And here’s why.
Impact Of Low Engagement On Company Profits
The link between engagement and profitability isn’t just a theory. Gallup’s Q12 Employee Engagement Meta-Analysis details just how much low engagement impacts on profits. Involving 276 organizations and over 2.7 million employees in 96 countries, it’s the most comprehensive survey of its kind.
What was the biggest takeaway from their research? The bottom line is companies with highly engaged employees outperform their peers. According to the study, companies with engaged workers experience:
- 23 percent increase in profitability
- 18 percent increase in productivity (sales)
- 14 percent increase in productivity (production records and evaluations)
Gallup concludes that having an engaged workforce is a “differentiator.” So, how does a lack of employee engagement affect profits? Here are five critical ways that low engagement can affect your profitability.
5 Ways Low Engagement Impacts Profitability
It’s estimated that disengaged employees cost between $450 billion and $550 billion in lost productivity every year. Unmotivated, apathetic, and simply going through the motions, disengaged workers cost money. Low output, poor-quality work, and disproportionately taking up managers’ time mean low engagement affects your bottom line.
2. Poor Morale
There’s no doubt; low engagement can quickly spread throughout a workforce. Disengaged employees can be disruptive and breed resentment among their peers. If left unchecked, it can spill over into all operations, including team collaboration, idea-sharing, and company culture. Before you know it, your business is stagnating.
3. High Staff Turnover & Absenteeism
Staff members with low engagement don’t tend to hang around. Another job offer, and they are off. And good riddance, you might say. However, that means the time, money, and energy you spent recruiting and onboarding that individual was a wasted investment. That’s a lot of work for no payoff.
Furthermore, a lack of engagement can translate into absenteeism. Disengaged workers are often late to work or take more time off than their engaged colleagues. The Gallup survey found that companies with high levels of employee engagement see a whopping 81 percent improvement in absenteeism.
4. Quality Issues & More Mistakes
The Gallup meta-analysis reports a 41 percent improvement in quality (defects) in highly engaged workplaces. Furthermore, there was a 64 percent improvement in safety incidents.
Unfocussed and lacking in care and attention, low engagement among employees leads to quality issues. And it allows errors and mistakes to creep in. Inferior quality products and services result in unhappy and dissatisfied customers. And for industries where safety is critical, lack of engagement can even result in expensive and damaging lawsuits.
5. Customer Service
Poor products and services are only one aspect of the low engagement problem for customers. Just as important is the impact low engagement has on customer service.
Disengaged workers that are highly unlikely to go the extra mile for customers. In fact, your valuable customers are likely to sniff out uninterested customer service personnel from a mile away. With plenty of competitors offering similar services and products in the marketplace, many customers will simply go elsewhere.
How To Recognize Employees With Low Engagement
So, low engagement is a significant drain on company profits, but how do you identify affected employees? Here are five tell-tale signs that your worker may be suffering from low engagement.
1. Lack Of Initiative
Disengaged employees typically just go through the motions. They may get the job done but rarely offer any insights or suggestions for improvement. Usually, they must be told what to do all the time. And even then, they will just do the bare minimum and log off at 5 pm on the dot.
2. Excuses, Excuses
Nothing is ever the fault of the disengaged worker. Failure to meet a deadline is not down to them. And a late arrival to work is blamed on bad traffic rather than bad time management. Your serial complainer who has an excuse for every failure may well be suffering from a lack of engagement.
3. Not A Team Player
Some employees are natural introverts. However, workers who are silent in meetings, fail to participate in team outings, or prefer to work independently, may be disengaged.
4. Uninterested In Personal Growth
Employees who lack engagement are generally not interested in professional development. By contrast, highly engaged staff want to grow and learn in their role. They have a natural curiosity and display a willingness to try out new things. So, if you actively promote learning and your worker is still not interested, low engagement could be the root cause.
5. Productivity And Output
Have you noticed a dip in performance with your employee? Perhaps their output has declined, or there has been a decrease in quality. Significant changes in performance could be an indicator of low engagement. Disengaged workers tend to be less concerned about their work, allowing sloppiness and errors to creep in. Of course, there may be other factors other than engagement at play. And so, you should thoroughly investigate any sustained changes in performance.
Ways To Increase Low Engagement: Tools To Use
Addressing low engagement takes time and effort. However, it’s not insurmountable. The task is made easier by using tools already available in the workplace. Here are some ideas on how to make quick wins on employee engagement using the employee intranet to get you started.
Promote Company Culture With An Intranet
Your intranet allows you to break down some of those barriers that exist between management and staff. An intranet can inspire collaboration and encourage open communication with management and across teams. And it also adds a human touch to cold policies.
For example, introducing a new wellness policy? A video message from the president is a more effective communication vehicle than a dull document. The tone of voice, countenance, and warmth of feeling come through in speech.
And why not address the need for ongoing dialogue by having the president encourage comments and feedback. Let employees know that company leaders care about their opinions. Create forums or online polls to gather staff input before major decisions are handed down. Be sure supervisors contribute as well, encouraging their staff to get involved. And address head-on any fears that speaking out will have negative consequences.
Celebrate Staff With An Intranet-Based Employee Recognition Scheme
When it comes to getting the best out of staff, recognition from managers is the number one motivating factor. It’s more important even than monetary rewards. Use your intranet to develop and publicize a company-wide employee recognition program. Get staff to nominate their colleagues or a team that has gone the extra mile in providing a service. Perhaps they have come up with a great innovation or money-saving idea. Be sure to publicize winners through the intranet’s news feed, team chat, or the CEO blog. Often the public shout-out and recognition are all that’s needed. However, workers will also appreciate a shared pizza lunch!
While you are at it, why not recognize the achievements of staff outside work too. A strategically designed intranet is the perfect platform to praise workers and not just about company accomplishments. Congratulate employees on life’s milestones, such as earning a degree or getting married. Celebrate John in Accounts achievement of completing a marathon for charity. Or the arrival of a baby girl to Martha in HR. What’s important here is the public recognition of a job well done, whether professionally or personally.
Promote Responsibility With Employee Self-Service On The Intranet
The intranet is the perfect platform for promoting greater responsibility and autonomy through employee self-service. The intranet is the central hub for company information and data. Staff have at their fingertips all the tools and resources they need to get the job done.
Furthermore, an advanced search and logical site navigation ensure field technician Sam to easily locate information via the mobile-friendly intranet. It’s a great time saver for Sam and means he has more control over his work. Plus, your customers will appreciate the fast and responsive service.
Similarly, employees can use the intranet to complete online business processes. From booking a vacation to ordering new supplies, the intranet is faster and more accurate. The worker simply completes the online form. And the intranet automatically routes it to the correct department for action.
And how about the comprehensive online staff directory? Employee profiles highlighting current projects, and areas of expertise allows staff to readily identify internal sources of help. It’s a straightforward task for Jordan in Marketing to target members of a cross-departmental digital marketing group.
These are just some ideas on how an intranet can deliver quick wins on low engagement. Check out MyHub’s blog for more tips on developing a comprehensive and downloadable employee engagement action plan.
Low Engagement: Ways To Measure Success
As with any new initiative, you need to have measures in place to assess how well you are doing. Regular employee surveys are a mainstay for many businesses. Below we share other ideas on how to measure the effectiveness of employee engagement in your organization.
Standard HR statistics such as recruitment, retention, and absenteeism speak volumes about the health of engagement. Keep a check on what your HR statistics are telling you. Tracking recruitment, retention, and absenteeism over time helps you identify any underlying issues you need to address.
If you don’t already conduct exit interviews with outgoing staff, now is the time to do so. Understanding the reasons why employees are leaving tells you a lot about what’s happening on the ground. And it provides a good indication of the extent of low engagement in your business.
Departing employees have nothing to lose. Therefore, they are more likely to give you an honest appraisal of how the company is doing on employee engagement. Furthermore, a clear understanding of the sources of employee dissatisfaction makes you better placed to act.
Net Promoter Score
This is similar to the familiar concept of a customer net promoter score. However, instead of customers, it’s employees who assess on a 1-10 scale how likely they are to recommend your company. The responses are analyzed with promoters at one end of the scale, passive neutrals in the middle, and detractors at the other end. A positive score means you have more promoters than detractors in the workforce. And a score above 50 indicates a positive company culture and engaged staff.
Low Engagement Impacts Revenue And Profits
It’s a simple equation: lack of engagement impacts your bottom line. Use the practical ideas and tips in this article to get started on turning the tide. And check out the suggested employee metrics to measure how successful you are.
Still not convinced low engagement has that much impact on profits? The following statistic will help to put it in perspective:
- Businesses with highly engaged workforces outperform the competition by 147 percent.
Don’t be satisfied with low engagement. Take steps now to address the lack of engagement and see improvements in the following areas:
- customer service
- errors and defects
- absenteeism and staff turnover.
Your bottom line, as well as future growth and profits, are at stake.
Start by developing an intranet that encourages dialogue, open communication, and overall pride in the company. Get in touch with the expert team here at MyHub for a free demo or a no-obligation 14-day trial. And see for yourself the difference a company intranet can make.
Lack Of Engagement Additional Resources
Browse the MyHub blog for a wealth of thought-provoking information on employee engagement. Here is just a selection of the topics available.