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How Employee Engagement (or Disengagement) Impacts Your Bottom Line

How Employee Engagement or Disengagement Impacts Your Bottom Line

You bring qualified, top talent to your organization. You run them through a robust onboarding program and send welcome boxes to their home. You check off all of the boxes for “Great Place to Work” programs. But for some reason, your talent continues to quit in droves. You don’t know what you’re doing wrong and wonder what’s bubbling underneath the surface.

With record numbers of workers leaving their jobs, it’s never been more clear that the U.S. has an employee engagement crisis on its hands. If the last two years of the global pandemic have taught us anything, it’s that prioritizing employee engagement is critical. Yet, many organizations are still struggling to retain workers.

In the face of what’s become known as the “Great Resignation,” we must ask ourselves: Are our employees passionate about what they do, and contributing to our organization’s goals?

If the answer is “no,” you may be facing employee engagement issues. Below, we’ll explore what drives employee engagement, the impact of disengaged employees, how engagement impacts your bottom line, and how to solve employee engagement issues in your organization.

The Impact of Disengaged Employees

How Employee Engagement or Disengagement Impacts Your Bottom Line

So what exactly is employee engagement? Perhaps Josh Bersin puts it best in saying that employee engagement deals with “the issues of happiness, retention, capabilities, rewards, productivity, and the complex problem of creating a ‘great place to work.’”

In a world where many organizations had to pivot to remote and hybrid models overnight, employee engagement took a huge hit and experienced record lows in 2020 in the U.S. And it has only increased slightly since then.

Why?

Because many leaders still aren’t making the connection between engagement and their bottom line. Think of employee engagement as similar to the “boiling frog effect”. A frog placed in gradually heating water won’t notice the slow yet harmful change in its circumstances, leading to the frog being boiled alive. Similarly, employee disengagement is an issue that has catastrophic consequences if left unaddressed.

Disengaged employees are more likely to steal, negatively impact coworkers and customers, and take sick days, according to Gallup’s State of the American Workplace report. Additionally, employee disengagement has been shown to:

Conversely, workers who like what they do perform better, stay with companies longer and are less burned out than disengaged workers. According to the aforementioned Gallup report, companies with engaged employees see positive benefits, including:

  • 21% higher profitability
  • 10% higher customer metrics
  • 17% higher productivity
  • 20% higher sales

Clearly, the impacts of higher employee engagement aren’t just visible in morale — they’re financial, too.

Four Critical Drivers of Employee Engagement

How Employee Engagement or Disengagement Impacts Your Bottom Line

In the past, employee turnover was driven by a lack of advancement opportunities, the desire for a better salary, or the need for more flexibility. Today, we see that causes for employee turnover look different than they did a few years ago. Workers want much more from organizations than a paycheck and will leave if their expectations aren’t met in key areas, including:

  • Culture: One survey revealed 34% of employees said company culture was the reason they were looking for a new job.
  • Empathy: 92% of employees say that more empathetic managers would increase their likelihood of sticking with an organization.
  • Onboarding: One SHRM survey showed 76% of respondents didn’t think their companies did a good job with onboarding. A poor (or absent) onboarding process leads to lower productivity and engagement, and higher turnover.
  • Training and Development: 94% of employees say they would stay at a company longer if it invested in their career development.

Solving the Employee Engagement Crisis: Getting Buy-In

How Employee Engagement or Disengagement Impacts Your Bottom Line

So, what can you do if you know your organization has a problem with employee engagement? The key to addressing employee engagement dysfunctions is to start by exposing them. This will involve a concerted internal marketing and communications effort. After awareness is raised throughout the culture, traditional strategies are able to work better.

But how can organizations create this awareness?

Assess the culture

Start by asking workers specific, targeted questions beyond traditional or pulse surveys. For example, groundbreaking research in The WorkProud Study found that workplace PRIDE has a strong impact on employee engagement and business outcomes. Make sure to measure perceptions of employees’ pride in their work and in their company, as this will provide important insights into other employee experience indicators such as retention and engagement. Additionally, ask employees to rate their opinions of things like trust in their managers and colleagues, teamwork, development opportunities, recognition, pay, and other drivers that have the largest impacts on your employees’ engagement and intent to stay.

Get buy-In for change 

After analyzing your research, it’s time to share it with key stakeholders. Because employee engagement is ‘intangible’, it can be tricky to get buy-in for initiatives to improve it from the C-suite. Therefore, it’s important to tie it to company business results. For instance, show the exact cost of employee disengagement and employee turnover to illustrate how high the stakes are.

Educate the Workforce

Managers are in prime positions to influence the employee experience. Once you’ve shared insights about what’s working (and what’s not), include and educate managers.  One of the most powerful ways to increase employee engagement is through recognition. Be clear about what part they can play in driving a culture of recognition and empower them to play it.

Managers can help facilitate recognition by:

  • Implementing technology and systems that create a culture of recognition
  • Enabling and encouraging peer-to-peer recognition
  • Recognizing team members for providing help, coaching, or mentoring
  • Celebrating differences and baking D&I into internal and external company communications

In what’s become a remote-first world, recognizing employees can boost individual and team morale. This, in turn, can lead to longer tenures.

Employee Engagement is a Marathon (Not a Sprint)

It’s important to remember that improving employee engagement doesn’t happen overnight. In addition to following the above guidance, remember to start small. Show your workers you’re setting an intention to make their experience better. Remember, progress matters more than perfection. Employee engagement is and always will be a journey, not a destination.

Ready to get started? Download the WorkProud Study and begin a conversation about your company’s specific situation. 

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