The Cost of an (Un)Engaged Employee

“Forty percent?!” I cried out in disbelief.

My boss just informed me the cost of employing an unengaged employee cost the company 40% more than those who found meaning in their work.

I simplified the impact in my head.

I could pay an engaged employee an annual salary of $100k. But, if I continued to abdicate my responsibility in making sure people understand why their work matters, I’d have to pay upwards of $140k to retain that same talent.

Yikes!

I began to realize why he wasn’t a proponent of, “The beatings will continue until morale improves.”

Ok, this—thankfully—isn’t my story, but it is based on the findings in Dan Ariely’s (et al) 2008 study, Man’s search for meaning: The case of Legos from the Journal of Economic Behavior and Organization.

Unengaged employees come at a premium of 40% when pay is the only differentiator.

What would it mean for your company to reduce payroll by 40%?

While this may not be the likely outcome, it’s a window into what your business isn’t accounting for as it fights to increase productivity and drag wayward desk warmers back to the office.

It may also be why you, once able to attract and retain talent at below-market levels, are now struggling to find capable employees.

If you’re struggling to find the right people for the “right pay” you can afford, the issue may not be pay.

That may just be the symptom.

It might just be the job you’ve set up, the environment surrounding it, and how (dis)connected it is from the reality of your business.

There’s an interesting rift between company leaders who say, “I’m looking to you, front line employee, to solve our complex issues!” and the front-line employees who say, “I’m looking to you, manager/leader, to give me clear direction on how to solve our complex issues!”

In both cases, each is looking to the other for help. An admirable part of being a team!

In the front-line employees’ case, however, they’re working day and day out on the tasks they’ve been given and have been doing for years.

Leadership often shirks its shared slice of the pie. Having sat in leadership chairs for too long, they’re too removed from the daily work to understand the exact direction. Rather than admit they don’t know how to fix it, rather than admit a gap in knowledge, blame travels up and down so they’re not left holding the hot potato.

Is it any wonder engagement suffers?

So how do you reclaim what you’re able to and fix this?

First, company leadership must have and set a clear vision.

Next, each department, and the department below that, and so on, needs a purpose. If the company is trying to achieve a certain goal, it should be mandatory that each role in the company also has a purpose that serves that vision.

When no connection to the vision exists, no connection between the work and the outcome exists, and engagement is lost.

Yes, everyone has their own personal why they bring to their job, but the company must also provide a why that answers what their job is supposed to do.

So, you cannot stop at a company vision. Each department needs to answer the ‘why’ behind their work and establish purpose.

Continue this connection and then create metrics for the individual.

Company metrics are rear-view mirror summations of what was. But how does the individual know what they’re doing matters or how it moves the needle? How do you measure what will be?

You must create units for each group (or department) that help individuals know what they do and how it impacts company measures. These support why the work matters.

Engaged employees know how to win at their job. They understand what they do, why it ultimately matters, and believe in the vision you’ve set for the company.

Doing this gives you two major wins:

1.      You (the company) discover employees who are in the wrong seat on the bus sooner, and

2.      Those who are just there for a paycheck don’t bring everyone down. Because, at the least, they know what they must continue to do to keep their job.

Your company may be disconnected from itself because the work that’s being done is divorced from the vision and direction you want the company to go.

You can implement a foundation that heals the source issue of employee engagement.

Reclaim ownership in your responsibility in connecting with your company and the managing peers around you and watch as those who report to you begin engaging to heal themselves and the company.

The Healthy Company Framework shows you how to build this for yourself and for your company. And, where help is needed, Company Connections is here to help you achieve the vision of success you’re after.