By now, employee engagement should be a top priority for any company. Unfortunately, even in 2016, many companies still don’t see the value of employee engagement; whether this is due to oversight or just plain apathy, more problems arise from lack of employee engagement than even the companies themselves may realize. There are a multitude of ways to strive for strong employee engagement within a company or organization but, first, let’s back up a little.
Just what is employee engagement?
“Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work.” – Custom Insights
Okay, excellent. Now that we know what it is, let’s talk about what the cost of ignoring it is. Based on research out of the Integro Leadership Institute and Gallup, Recognize This! Reports that “Lack of employee engagement costs you 35%-50% of your payroll, or up to $17.5 Million annually in a 1,000 person organization.” Wow. Should I say that one more time for dramatic effect? Okay, here we go—you are wasting 35% to 50% of your payroll if you lack employee engagement. Any way you look at it, there isn’t a single company that can afford that kind of waste.
The numbers don’t lie
To further drive the point home, I’ve created a list of ten statistics to keep in mind about employee engagement:
- The cost of replacing an entry-level employee is 30-50% of their annual salary. The cost of replacing a mid-level employee is 150% of their annual salary. The cost of replacing a high-level or highly specialized employee is 400% of their annual salary. (ERL Media)
- On a monthly basis, actively disengaged employees have 2.17 unhealthy days, compared with 1.25 unhealthy days for engaged employees (Gallup)
- Customer retention rates are 18% higher on average when employees are highly engaged (Cvent)
- Almost 50% of organizations fail to measure employees’ engagement with the customer or the brand (Edelman)
- An engaged worker aged 40-49 costs $127.76 per month in lost productivity due to unhealthy days, while an actively disengaged worker in the same age range costs $236.20—an 85% increase (Gallup)
- 91% of highly engaged employees always or almost always try their hardest at work, compared with 67% of disengaged employees (Temkin Group)
- The top three challenges faced by HR organizations today are turnover, employee engagement, and succession planning (SHRM)
- Engagement plummets to 2% among teams with managers who ignore their employees, compared 61% for teams led by managers who focus on strengths (Gallup)
- 68% of employees say their managers aren’t actively engaged in their career development (Right Management)
- Actively disengaged workers are nearly twice as likely as engaged workers to have been diagnosed with depression (Gallup)
Many of these stats are eye-popping, don’t you think? When it’s laid out for you like that, it’s hard to imagine why any company wouldn’t be doing everything they can in order to ensure their employees are engaged.
Lose-lose vs. Win-win 
Lack of employee engagement really is a lose-lose. Companies might think they’re saving money by keeping the “extra” activities and strategies to a minimum but – as you’ve seen so far—this simply isn’t true. All this will do is leave employees unhappy and companies with sub-par work. No one wins in this scenario.
Now, a win-win looks like this: employees are happy because they are working for a company and/or cause they actually care about. In turn, the company maximizes productivity and the work produced by employees is of a much higher quality. Everyone wins in this scenario.
Which would you choose?
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