Why companies can’t afford an unhappy workforce
Employee engagement is a matter of existential importance for many companies; it has an outsized impact on the company's bottom line, and in many ways is an untapped resource.
Even in the top performing countries for engagement, US and Canada, less than a third of workers (29 per cent) are psychologically committed to their jobs, with East Asia trailing in last at 6 per cent. This has a huge impact globally, with a Gallup report putting the cost of disengaged workers at US$350 billion annually in lost productivity.
A 2014 report from TINYpulse of 200,000 people shows that only 21 per cent of employees feel strongly valued at work. Almost half (49 per cent) said they were dissatisfied with their direct supervisor, and 15 per cent of every employee surveyed saying they had interviewed for another job in the past three months alone.
The fact that 15 per cent of the employed workforce is actively looking for jobs is bad news for businesses because turnover is expensive. How expensive? The cost of replacing an employee earning US$50,000 can be as much as 20 per cent of their annual salary in recruitment costs, lost work while the position is empty and productivity lost during training of a replacement.
Even lower paying position of US$30,000, where turnover is higher, can still be expensive at 16 per cent of salary, which adds up when you consider that more than a third (37 per cent) of US hotel/motel and food services workers voluntarily left their job in 2011.
The numbers not only make for a stark illustration about the cost of dissatisfaction in the workplace, but also makes clear the benefit of high employee engagement as a productivity solution.
A 2012 Gallup study compared the top quartile of engaged workers against the bottom, and found the top had 22 per cent higher profitability, 10 per cent better customer ratings, 28 percent fewer incidents of theft and almost half the number of safety incidents.