Numerous study findings support the links between employee satisfaction/ engagement and customer satisfaction and employee productivity and ultimately financial results. Engaged employees are more innovative, more productive, more committed to customer satisfaction, and accordingly, produce more profits for their organization than their less engaged peers. So, what’s lower levels of engagement truly costing you?

Think about this:

- How much money would your organization save if you could improve employee engagement and subsequent productivity by just one percent?
- How could your organization use those dollars if they weren’t thrown out the door in lost productivity (training, enrichment programs, total rewards, incentives, etc.)?


What’s the price tag?

Check off some of the expenses and possible lost revenue associated with a disengaged employee in your organization:

Overload (and possible overtime/comp time paid) on the team members who have to pick up the slack

Training time and expenditures over and above “normal” training time needed to bring a disengaged employee up to productive speed

Extra orientation time (and persuading them “why it’s worth it”) needed in taking on new assignments

Extra time needed to meet deadlines and subsequent compensation expended

Lost customers and dollars of revenue associated with the lack of interest in doing “what’s needed” to keep the customer satisfied

Reduced revenue from less-than-full service and attention during the sales process

Absenteeism

Health premium increases due to higher claims’ rates

EAP charges

Lowered morale and consequential productivity

Loss of other employees’ productivity who listen to the disengaged

The global facts about employee disengagement


According to a recent Gallup survey, consider today’s workforce:

- 55% are not engaged
- 19% are actively disengaged, spreading discontent

Note: by “not engaged” we mean those that show up, physically, to work everyday but fail to bring their passion, commitment and discretionary effort. They are just getting by, doing the bare minimum, and perhaps looking for a new job or waiting for the market to turn. By “actively disengaged” we mean those who spend the majority of their time, spreading their discontent.


Run The Numbers … What’s the hit to your bottom line?

Let’s apply the generalized findings above to the people who work for you:

In order to calculate what it means to your team, your group, your department, you need to take the follow steps:

1. The total payroll of the group you are considering is: $___________________
2. The value of the productivity lost and subsequent compensation lost due to your employees that are disengaged equals 55% X 10% (the productivity loss from this group) X #1 (total payroll of the group) = ____________
3. The value of the productivity lost and subsequent compensation lost due to your employees that are actively disengaged equals 19% X 30% (the productivity loss from this group) X #1 (total payroll of the group) = ____________
4. The total cost of disengagement for your group is estimated to be what you calculated for the disengaged (#2 above) and your actively disengaged (#3 above): ____________

In order to calculate the cost of disengagement as it pertains to any one of your employees:

1. List each employee who is you believe may be “disengaged”
2. Determine the compensation for each employee that you have listed as potentially being “disengaged”
3. Multiply the employee’s compensation times 10% to estimate the value of productivity lost due to that employee’s disengagement
4. List each employee who you believe may be “actively disengaged”
5. Determine the compensation for each employee you have listed as potentially being “actively disengaged”
6. Multiply the employee’s compensation times 30% to estimate the value of productivity lost due to that employee’s active disengagement

The dollar values you have calculated above provide you an insight into the value of increasing the level of engagement of your employees, as a group and for each person within the group. Think about it – these are compensation dollars you are wasting, compensation dollars you could reclaim by increasing your employees’ engagement levels and subsequent productivity.

What I can do...

SMALL
- Consider how much more work could your team, group or department do if each one of them worked one more hour per day, without additional pay!

- Consider the deadlines that are missed, the problems that are created by team members who “are just not feeling good” and call in sick

MEDIUM
- Estimate the dollar value of revenue lost because one of your team members just didn’t go the extra mile in solving a customer problem and lost the customer in the process

- Estimate the dollars of overtime paid, comp time rewarded or outside help hired to meet a deadline, complete a project, fulfill commitments

- Estimate the time that could have been saved, the operating dollars that could have been reduced if there was more creative thinking and then doing concerning the team addressing a problem or a process

LARGE
- Calculate the dollar benefits of keeping your employees engaged, of increasing your employees’ levels of engagement. Use the Run the Numbers calculator above to estimate the cost associated with lost productivity attributable to less-then-full engagement.

- List those workers on your team whose engagement, productivity and outcomes are necessary to meet departmental/organizational goals. For each one, identify the financial impact (in payroll dollars) of a slight decrease in their productivity and the consequential need to assign comparable personnel (in skills and therefore in compensation) to help meet the departmental/ organizational goals.

And if turnover is hitting your bottom line, you can now calculate those costs using an on-line turnover calculator:
http://www.careersystemsintl.com/employeeretention.htm
The bottom line to your bottom line is you can Take Action! There are things you can do, as a department, a division and an organization. Career Systems has some new and innovative offerings to increase engagement and reduce turnover in your organization. Call on us to learn more.