What is a “disengaged employee”?
A disengaged employee is described as one who is not happy with their job or company, unproductive (due to dissatisfaction), negative, non-participatory, displays high rates of absenteeism, and appears to have no interest in improving nor growing.
What does disengagement cost my company? Is there a benchmark?
First, determine how many employees you may consider as disengaged. Using any of the engagement measurements on the next page, you can get a general idea for your organization.
Gallup found, through its research, that their disengaged employees cost the organization on average about 34% for every 10k of their yearly salary ($3,400 for every $10,000 in yearly salary).
With that, if you find that 20% of your 5,000 employees are disengaged, and considering a median yearly salary of $60,000, then using Gallup’s calculations you can come to this estimate:
- 5,000 x .20 (20%) = 1,000 (the total number of disengaged employees)
- 60,000 x .34 (34%) = $20,400 (yearly cost of each disengaged employee)
- 20,400 x 1,000 = 20,400,000 (yearly costs for disengaged employees)
That is a huge sum – it is definitely worth resolving disengagement issues!
What measurements can help determine disengagement?
First, and maybe best, be proactive – implement surveys.
Annual engagement surveys and pulse surveys can identify engagement issues before they disrupt your organization entirely.
- Annual Engagement Surveys – a popular format of survey distributed yearly. Great for obtaining data driven information of employee engagement, and good for establishing the benchmark to gauge your progress and improvement.
- Pulse Surveys – conducted more frequently and as the name suggests, used to get a pulse or snapshot of employee satisfaction at any given period or interval. Distribute these surveys as often as the organization desires.
Both vehicles provide great data by asking specific questions to determine engagement drivers. These surveys will provide a holistic view of how employees feel, as well as a starting point to focus your improvement efforts. Another benefit is that these surveys establish a base for tracking progress over time. You can also compare data from both surveys to get an even clearer picture of your workforce’s engagement.
- Employee Net Promoter Score (eNPS) – this survey is like the Net Promoter Score (NPS) created for measuring customer loyalty. eNPS uses comparable questions as the NPS, such as “How likely are you to recommend this company as a great place to work?” Employees respond anonymously on a scale of 1 – 10, with “1” being “not likely” and “10” being “very likely”. Categorize responses into three separate buckets: Detractors (those unlikely to recommend) will score 0-6, Passives (middle of the road) will score 7-8, and Promoters (highly supportive) will score 9-10. While this survey does not tell you why employees are unhappy, it does give you an idea of how many may be engaged versus disengaged.
An important thing to remember is that measuring employee engagement must be consistent and regular to obtain usable data.
Other useful measurements
- 1-On-1’s – This method consists of individual meetings with employees and is an excellent way to measure engagement AND connect with your team. Having an informal, regularly scheduled chat with your team gives you information on what is happening in their world and how they are affected. The chats are in person and confidential so employees may be more likely to share.
- Stay Interviews – Ahead of “Exit Interviews,” consider Stay Interviews if time and resources permit. Stay Interviews help start a discussion before an employee considers leaving and can be valuable in improving organizational processes, as well as identifying training requirements. The purpose is to understand what makes an employee remain with the company (what is working), and what may make them want to leave (areas requiring improvement).
Metrics – great gauges of employee engagement
- Voluntary Employee Turnover Rate – Voluntary Turnover occurs when an employee leaves a company on their own. Many times, a high turnover rate indicates low levels of engagement. This metric measures the number of employees who are leaving your organization over a specific period.
The following information is required to calculate Employee Turnover:
Average number of employees during the year (E)
(add the number of employees at the start of the year to the number of employees at the end of the year then divide the sum by two)
Number of Departures during the year (D)
Divide (D) by (E) * 100 = Annual Employee Turnover Rate
- Employee Absenteeism Rate – Absenteeism is when employees regularly fail to report to work and is often a red flag for disengagement. This metric measures the percentage of employees absent over a specific period.
The following information is required to calculate Employee Absenteeism:
Days of absences (A)
Total workdays for period (W)
Divide (A) by (W) * 100 = Absenteeism Rate
How do we fix it?
So, we have calculated the costs of disengagement, and considered methods to measure impact, what now?
To begin, of course we need to reduce the number of disengaged employees. There are many options to resolve the issues you have revealed. Those options depend mostly upon your findings, but here are a few suggestions:
- Career/Learning – discuss where employees would like to go in their career – and how you can help them get there. Establish a culture that supports growth and development.
- Develop Great Managers – leadership has a significant impact on the employee experience. It has been said, “people don’t leave bad jobs, they leave bad managers.” Managers should be empathetic, empowered and encouraging. Align performance management and disciplinary procedures with improving the workforce.
- DEI&B – everyone should be heard, valued, and respected regardless of their differences. Diversity, by definition, often creates a high-performing workforce – do not miss this basic!
Strategic HR Consultants has the skill and expertise to help you improve engagement, build high-performing collaborative teams, and retain revenue that could be lost because of a disengaged workforce!
We are excited to be your Business Partner!
