Employers who feel like their employees are just barely there are not alone. Employee disengagement is a big problem across industries. Gallup reported that only one in three employees feel fully engaged with their jobs, with about one in six feeling actively disengaged from their roles within the company. Although disengagement happens for a variety of reasons, the solutions are similar. Businesses can actively work to improve employee engagement, with benefits ranging from greater retention to fewer mistakes in production. Interestingly, studies show that 75% of employees feel more valued and motivated when they receive gifts from their employer, highlighting that even small tokens of appreciation can make a significant difference. Employers can use these methods to determine the value of any employee engagement initiative.
Factors Affecting Employee Engagement
When employees feel like they do not understand or relate to the roles they fill at their places of employment, they may disengage. Gallup revealed in a 2023 survey that most employees do not have a clear understanding of their day-to-day responsibilities. Others report that they feel like the company does not care about them or that they do not relate to the organization’s mission and goals. Businesses that fail to consider these factors may contribute to stagnating engagement levels, as employees feel like the situation is unlikely to get better.
Cost of Low Employee Engagement
Disengaged employees cost companies much more than just an inconvenient working arrangement. The 2023 survey estimates that employees who are actively or somewhat disengaged cost businesses about $1.9 trillion in lost productivity each year. This staggering sum makes sense in context. Disengaged employees do the bare minimum, and sometimes less. They are more likely to miss work, show up late or leave early. They may fail to account for industry safety guidelines or company rules, leading to mistakes that require expensive fixes. As such, businesses that work to address the causes of employee disengagement often notice an improvement in these arenas.
Advantages of Improving Employee Engagement
Every aspect of resource management involves a balance of investment and return, including employee engagement. Engaged employees work harder and make progress toward company goals, especially when they feel like they have a stake in its success. These advantages highlight the importance of employee engagement initiatives.
Reduced turnover
Employee turnover costs everyone at a company, from the owner or CEO to the ex-employee’s co-workers. When employees leave, the investment that the business made in training and other intangible benefits goes with the employee. Retention then becomes a key goal. Engaged employees feel like the company respects them and prioritizes their needs, which makes them more likely to stay. In fact, research shows that focusing on employee engagement can decrease turnover by 21 to 51 percent.
Better customer service
Engaged employees provide better service because they understand their roles more intimately and feel empowered to address customer concerns. They focus on their work and create products and services that provide an improved value to consumers. As such, increasing employee engagement is associated with a 32 percent decrease in product defects and a 10 percent increase in overall customer satisfaction, according to Gallup.
Higher sales and growth
Employees make the difference between a successful company and a failing one, with engagement at the top of the deciding factors. It’s reported that engaged employees improve productivity by 18 percent, with a 23 percent increase in profitability. These benefits can lead to better long-term growth for the company.
Increased employee satisfaction
Employee satisfaction can be a difficult concept to pin down, but the metrics show it. Employees who feel happy with their employers work more, increase their productivity and meet or exceed goals consistently. Engaged employees know that the business provides the keys to fulfilling employment, from a competitive salary and benefits to a welcoming workplace environment. They connect with the company mission — for example, when you put your logo on clothing, they will happily wear it.
How to Estimate Success in Engagement Initiatives
For any business deciding how to motivate employees to do more or better work, the proof lies in the measurables. C-suite executives may not want to invest in an employee initiative without evidence that it works. These metrics allow companies to determine how an employee engagement initiative improves daily function.
Productivity
The simplest way to measure the change in employee engagement comes in productivity. Managers can write down the employees’ output compared to inputs or compare current productivity to past productivity. Companies should evaluate various factors that may affect output, such as hours worked or changes to employee responsibilities. The measurement depends on the industry. Some may count in completed products, while others might look at customer tickets resolved.
Turnover
Employee turnover is expensive, especially for disengaged employees who are more likely to leave sooner. The Society for Human Resource Management estimates that losing an employee costs the business 6 to 9 months of that employee’s salary. Employers can measure turnover by taking the number of employees who leave each year and dividing it by the total number of employees. Decreases in turnover reflect a measurable improvement.
Absenteeism
Improving employee engagement can reduce absenteeism by up to 78 percent, Gallup notes. Employees who feel secure in their roles are more likely to show up for work, even on hard days. Businesses can estimate the effects of absenteeism by multiplying the employee’s absentee rate with their salary and adding that to a comparison of the employee’s average revenue generation. This method yields a daily amount that employers can use to compare input and output.
Revenue
Assessing revenue by employee can be a simple way for employers to assess general output. Dividing revenue by the number of employees shows how much the average employee contributes to revenue generation. Although this method does not reflect the varied roles that employees play within a company, it can be a useful guide to determine the success of employee engagement initiatives over a specific period of time.
Disengaged employees cost a company money, from lost productivity, turnover, absenteeism and more. Engaged employees step up to the plate and yield greater benefits to their teams and the business at-large. By considering the advantages of employee engagement and using these metrics to evaluate the success of engagement initiatives, companies can pave the way toward sustainable long-term success.
⸻ Author Bio ⸻
Howie Turkenkopf is VP of Marketing and Business Development at Stran Promotions Solutions. He has led marketing at Stran for 10 years and helps to convey Stran’s portfolio of services and its value proposition internally and externally to clients and prospects. Prior to working at Stran, Turkenkopf spent 15 years in the live music industry in marketing, merchandising and event operations roles.
