Are Your Employees Disengaged?

Guest blog by Terry Stockham, Human Capital Advisor at OnForce

Are your employees productive, content, and motivated? How can you tell? Typically, employee engagement can be measured with surveys, assessment tests, and by simply observing your employees as they work. Do you see strong contributors, poor performers, or a bit of both? If you’re a manager and see less than par players on your team, beware, they are sabotaging your success and your bottom line. All it takes is just one vocal, influential, and disengaged employee to spread his/her discontent to other team members for your group’s productivity to plummet.

According to recent research (the Gallup 2013 State of the American Workplace report and the AON Hewitt Global Engagement Survey), the current global employee engagement level is at 60%, an increase from 58% in 2012. This level of engagement equates to $550 billion a year in lost productivity within American companies. Yet these same companies spend billions of dollars a year in an effort to improve employee engagement and performance, only to get very little improvement in either!

To further illustrate the negative impact that employee disengagement can have on productivity and the bottom line let’s take, for example, a service employee who completes warranty work for a large technology company. This employee’s weekly salary is $1,000 (based on a 40 hour work week, $25/hour) and receives health benefits, insurance, training, etc., all totaling $1,400 ($1,000 + $400) paid by the company.

During the 40-hour work week, the service employee performs approximately 10 hours of non-service work such as traveling to customer sites, completing paperwork, waiting between job assignments, attending meetings, taking training classes, and so forth. This means that the company is paying for 40 hours but actually getting only 30 hours of service performance, translating to about $750 ($1,000 – $250) of “lost” productivity time. But, wait, there’s more.

If we take the 30 hours of actual service work performed and factor in the global engagement level cited at the beginning of this blog, we get only 18 hours ($450) of targeted service performance (i.e., 30 hours x 60%, or $750 – $300 = $450). If we look at the bigger picture, the company is paying $1,400 for $450 of performance! This is equal to $49,500 of lost productivity per year for this employee alone. If this company has 25 service employees, it amounts to $1,235,000 in overpayment for performance!

The past two decades have shown time and again that traditional incentive programs are not working. It is time to look at innovative and flexible labor models (e.g., flex-staffing or an on demand workforce) that offer workers autonomy, while driving positive business results for you and your company. Which jobs within your organization would benefit most from these new labor models? Given the cost implications of traditional labor models, can you afford the status quo?

Reference: OnForce