by Cynthia Spradlin
As we continue our series on 10 Top Performance Tips to Revolutionize Your Business in 2015 and as many embark on celebrating this special time and prepare for the new year it is appropriate that we talk about the importance of employee engagement. Four questions to ask about employee engagement include:
Today in this blogpost - we will be dealing with questions one and two. We address questions three and four in our Performance Breakthrough Blueprint Program which is an 8 week coaching and training program.
- What is Employee Engagement?
- Why Does Employee Engagement Matter?
- How is Engagement Measured?
- How Do We Effectively Impact Engagement?
Today in this blogpost - we will be dealing with questions one and two. We address questions three and four in our Performance Breakthrough Blueprint Program which is an 8 week coaching and training program.
EMPLOYEE ENGAGEMENT DEFINED
There are many definitions offered for engagement which include some confusion with happiness, well being and satisfaction. For this discussion we define engagement to mean...
Employee Engagement
the emotional commitment the employee has to the organization and its goals (1)
that positively affects the employee's performance on behalf of the organization
beyond simply meeting expectations.
the emotional commitment the employee has to the organization and its goals (1)
that positively affects the employee's performance on behalf of the organization
beyond simply meeting expectations.
Engagement is different from satisfaction in that satisfaction measures the degree to which employees believe their needs are met while engagement signifies the degree to which employees have an emotional connection to the organization and expend their discretionary energy to excel in performance when they have the opportunity and resources to do so.
WHY ENGAGEMENT MATTERS
The more we learn about the impact of engagement, or the lack thereof, on organizations and people, the more we find that its lack can create far reaching impact, touching everyone in almost any organization. Low engagement creates high costs for taxpayers, employers, and employees alike.
HIGH COSTS TO TAXPAYERS
The cost of low engagement by one estimate is $18 billion dollars annually for US Taxpayers alone. According to Gallup research, which segmented engagement levels measured by type of worker, “US federal government workers are less engaged than the rest of the workforce.” The difference in engagement was measured at about 4% and adds up significantly to equate to around $9,000 of lost productivity alone per federal employee who falls under their definition of “not engaged.
As it turns out, there are several categories for employees who lack engagement, according to the research studies. There are those employees who are not engaged (meeting but rarely exceeding expectations or unwilling to expend what has been coined “disretionary energy” on behalf of the organization). There are also employees who fall into the category of “actively disengaged”. Actively disengaged employees are employees who are not only unhappy at work (and potentially in their life as well) and whose behavior creates a negative pull on those other employees who might otherwise be engaged.
When the figures for both groups are combined, and converted to percentage figures - the cost comes out to a little over 11% of the average federal employee salary in lost productivity. None of these figures include calculations for other forms of cost: turnover, hiring & training costs, workers comp claims, errors, lost revenues, and other forms for costs.
HIGH COSTS TO EMPLOYERS
Although federal workers are more disengaged overall than their corporate counterparts, the costs are still significant for both the government and private sector alike. The difference of 4%, may seem small as a percentage, but the low percentage difference still has a big the impact on the private workforce, both in the US and abroad.
Worldwide Gallup estimates that only about 13% of employees are engaged at work (2). This translates into extraordinarily high costs on a global scale. The US statistics are a little better than the global numbers, but in the US, 70% of Americans report some level of disengagement with their work. According the Gallup research, the impact on the American economy of lost productivity is up to $350 billion per year (5). One estimate from a few years ago notes that the cost of Australia’s disengaged workforce reaches $51 billion annually (3), and in Germany, actively disengaged employees are estimated to cost the German economy between 122 billion and 134 billion euros per year (7). That equates to almost $167 billion USD. Since these numbers were published the figures for the costs have reportedly increased around the globe.
PERSONAL COSTS TO EMPLOYEES
Actively disengaged employees are also more likely to report feeling rushed, stressed and burned out due to work. One gallup research poll showed a significant number of employees who report burnout or high levels of stress that affect their well being are also employees who are actively disengaged or not engaged. These employees take almost 3 times as many sick days per year as their engaged and thriving counterparts (4). Among German workers, for example, a full 47% report being not engaged or actively disengaged AND struggling or suffering (4). That is almost half the workforce there experiencing both disengagement and significant effects to their well being. US figures for actively disengaged workers are lower than those in Germany, but the costs are no less significant.
What’s more, recent studies over the last decade are showing a distinct correlation between workplace stress and health problems, like heart disease among others. For example, at least one study found a “30% lower liklihood of coronary heart disease for workers with positive perceptions of their work environment compared to those with unfavorable perceptions” of the same (6).
HIGH COSTS TO TAXPAYERS
The cost of low engagement by one estimate is $18 billion dollars annually for US Taxpayers alone. According to Gallup research, which segmented engagement levels measured by type of worker, “US federal government workers are less engaged than the rest of the workforce.” The difference in engagement was measured at about 4% and adds up significantly to equate to around $9,000 of lost productivity alone per federal employee who falls under their definition of “not engaged.
As it turns out, there are several categories for employees who lack engagement, according to the research studies. There are those employees who are not engaged (meeting but rarely exceeding expectations or unwilling to expend what has been coined “disretionary energy” on behalf of the organization). There are also employees who fall into the category of “actively disengaged”. Actively disengaged employees are employees who are not only unhappy at work (and potentially in their life as well) and whose behavior creates a negative pull on those other employees who might otherwise be engaged.
When the figures for both groups are combined, and converted to percentage figures - the cost comes out to a little over 11% of the average federal employee salary in lost productivity. None of these figures include calculations for other forms of cost: turnover, hiring & training costs, workers comp claims, errors, lost revenues, and other forms for costs.
HIGH COSTS TO EMPLOYERS
Although federal workers are more disengaged overall than their corporate counterparts, the costs are still significant for both the government and private sector alike. The difference of 4%, may seem small as a percentage, but the low percentage difference still has a big the impact on the private workforce, both in the US and abroad.
Worldwide Gallup estimates that only about 13% of employees are engaged at work (2). This translates into extraordinarily high costs on a global scale. The US statistics are a little better than the global numbers, but in the US, 70% of Americans report some level of disengagement with their work. According the Gallup research, the impact on the American economy of lost productivity is up to $350 billion per year (5). One estimate from a few years ago notes that the cost of Australia’s disengaged workforce reaches $51 billion annually (3), and in Germany, actively disengaged employees are estimated to cost the German economy between 122 billion and 134 billion euros per year (7). That equates to almost $167 billion USD. Since these numbers were published the figures for the costs have reportedly increased around the globe.
PERSONAL COSTS TO EMPLOYEES
Actively disengaged employees are also more likely to report feeling rushed, stressed and burned out due to work. One gallup research poll showed a significant number of employees who report burnout or high levels of stress that affect their well being are also employees who are actively disengaged or not engaged. These employees take almost 3 times as many sick days per year as their engaged and thriving counterparts (4). Among German workers, for example, a full 47% report being not engaged or actively disengaged AND struggling or suffering (4). That is almost half the workforce there experiencing both disengagement and significant effects to their well being. US figures for actively disengaged workers are lower than those in Germany, but the costs are no less significant.
What’s more, recent studies over the last decade are showing a distinct correlation between workplace stress and health problems, like heart disease among others. For example, at least one study found a “30% lower liklihood of coronary heart disease for workers with positive perceptions of their work environment compared to those with unfavorable perceptions” of the same (6).
A WORTHY CAUSE
Improving employee engagement is not just a worthy business endeavor but also a highly worthy cause. | Improving engagement within organizations, wherever they are located, is a worthy endeavor of any manager, owner or organizational leader. While we have focused on the costs here, the benefits of increasing engagement go well beyond just a reduction in the costs mentioned. We have not even begun to address the positive impact engaged employees can have on innovation, customer happiness and both customer and employee loyalty. We have not explored the ripple effect that better health and feelings of well being have as these get shared outside of the workplace, in homes and families around the world. Therefore, improving employee engagement is not just a worthy business endeavor but a highly worthy cause. |
NEXT STEPS
Once one decides engagement is worth one's focus, the next two steps involved are knowing how to measure engagement and then implementing effective interventions to move the needle on engagement in a positive direction. Working with a professional can help tremendously in this area. According to a recently published study on organizational coaching conducted by Price Waterhouse, coaching (either with internal coaches or managers or external coaches hired for such purpose) directly impacts both leadership and employee engagement (8). Coaching provided by the employee’s direct manager can have a significant impact on engagement. This can work both for or against the organization depending on the coaching skill set and training of the manager. This is another reason leading organizations will hire an external coach to either work with the managers, the employees or both.
As we prepare to take a break from our writing for a couple of weeks, and spend time with our friends and family to celebrate this holiday season, we look forward to continuing this discussion in 2015. In the meanwhile, if you are intrigued about how you can raise your energy and engagement in your own work and life, be sure to visit www.PerformanceBreakthroughBlueprint.com. When you sign up, you will receive 3 free gifts from us over the coming weeks that will help live, work and lead from your core and create your best year yet in 2015.
As we prepare to take a break from our writing for a couple of weeks, and spend time with our friends and family to celebrate this holiday season, we look forward to continuing this discussion in 2015. In the meanwhile, if you are intrigued about how you can raise your energy and engagement in your own work and life, be sure to visit www.PerformanceBreakthroughBlueprint.com. When you sign up, you will receive 3 free gifts from us over the coming weeks that will help live, work and lead from your core and create your best year yet in 2015.
Happy Holidays and Happy New Year!
References:
- Kruse, Kevin, (June 22, 2012) What is Employee Engagement, Forbes Online-Leadership, Retrieved on 12-17-2014 from http://www.forbes.com/sites/kevinkruse/2012/06/22/employee-engagement-what-and-why/
- Crabtree, Steve, (12-5-2014), Gallup Online, Retrieved on 12-17-2014 from http://www.gallup.com/poll/165269/worldwide-employees-engaged-work.aspx
- Martin, Yvette, (December 24, 2013) Gallup, “Helping Australia’s Stressed-Out Workers”, Retrieved from http://www.gallup.com/businessjournal/166355/helping-australia-stressed-workers.aspx on December 17, 2014.
- Nink, Marco, (April, 26, 2013) Gallup, “Low Employee Wellbeing and Engagement Hurt German Companies”, Retrieved from http://www.gallup.com/businessjournal/162053/low-employee-wellbeing-engagement-hurt-german-companies.aspx on December 17, 2014.
- Coffman, Curt (April 15, 2002) Gallup Online, “The High Cost of Disengaged Employees”, retrieved from http://www.gallup.com/businessjournal/247/the-high-cost-of-disengaged-employees.aspx on December 17, 2014.
- Business Journal, Gallup Online, (April 13, 2006), “Your Job May Be Killing You”, Retrieved from http://www.gallup.com/businessjournal/22375/Your-Job-May-Killing.aspx on December 17, 2014.
- Nink, Marco, (June 8, 2011), Gallup Online, “A Threat to German Growth”, Retrieved from http://www.gallup.com/businessjournal/147875/Threat-German-Growth.aspx on December 17, 2014
- 2013 ICF Organizational Coaching Study retrieved from http://icf.files.cms-plus.com/FileDownloads/2013OrgCoachingStudy.pdf on December 17, 2017
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