Employee Engagement is Costing your Business 5–6 Digits

In the Millennial and Gen Z era, employee engagement is equally as important as revenue

If you fail at employee engagement, you’re losing out on 3x your revenue.

With the plethora of startups in employee engagement and the knowledge of learning more about leadership in our hands, employee engagement still remains a $450bn — $550bn problem for businesses worldwide, according to The Engagement Institute. Yet, many organisations today are still not prioritising employee engagement.

Till today, only 13% of people feel engaged at work, according to Gallup.

In this day and age, organisations are faced with a unique problem: a multigenerational workforce made up of contrasting personalities and attitudes, stumping many HR leaders attempting to navigate it. It is small wonder why it is the second biggest problem keeping up HR leaders at night, according to a report by SHRM.

Employee engagement is not job satisfaction or job happiness. Someone satisfied with their job may not leave the office feeling that they have been engaged (think of the employee who comes late and leaves early, yet still collects a hefty paycheck). All engaged employees are happy, but not all happy employees are engaged.

All engaged employees are happy, but not all happy employees are engaged.

Many argue about the definition of employee engagement, but at its core, it focuses on how involved the people are in the success of the organisation. While we can extend that meaning to the meaningfulness of the job, the satisfaction they gain from completing tasks and the alignment with their morals, engaged employees are employees that will go the extra mile. They feel an emotional connection to your organisation. The organisation’s success is their success.

While employee engagement involves a strategic approach that requires time and resources to be invested into, what is perennial is that having engaged employees will prove to be a boon in the long game, especially with hidden costs.

Engaged Employees Stay Longer

Employee churn is expensive: there are estimates that it can cost at least 6–9 months of their salary, or upwards of more than 200%, according to Center for American Progress. These costs arise from training, onboarding, interviewing, job advertising, lowered engagement, deferred productivity and impact on overall team morale.

When your employee is engaged, they are 87% less likely to leave your company, even if research estimates that 43% of millennials will leave their jobs in 2020, according to Deloitte.

Having an employee leave costs way more than most businesses think—hence the hidden cost. It means spending more money on advertising the job, paying for training and spending time with interviewing and onboarding.

Fast voluntary turnover is an absolute killer — that means the previous expenditures on onboarding and training are wasted. Such turnover usually sends negative signals to the existing team: “Why did he leave so quickly? Is it something wrong with our leadership? Or is it the culture? What is wrong?” Such will lower the morale of the entire team and therefore negatively impact the productivity and overall engagement.

That’s expensive.

Engaged Employees are High-Performers

Let’s face it, if you love your job, you will a lot more than most people would ever do. Businesses have a priority to ensure that, even if the job is not what they want to do, the employee will go beyond what most will do at their positions entirely voluntarily.

Being disengaged creates stress and reduces creativity—which is costing billions of dollars in weekly revenue for companies in the States. When employers pay little attention to their employees, it reduces their productivity and increases their rate of absenteeism.

Businesses need to make employees feel energised and excited to come for work.

It’s not money that brings in the employee: according to HRDive, more than half of workers in the States are willing to sacrifice up to 29% of their salary to get a job they enjoy.

When employees are voluntarily ramping up their productivity and effort in their jobs, business results begin to exponentially grow. That means getting more work done and getting higher quality work. This chain effect results in an overall increase in revenue per employee.

That’s really expensive.

Employee engagement is insanely complex, yet undeniably tied to revenue and growth. Even in the most competitive or unhealthiest of cultures, injecting strategies and tactics to drive employee engagement will definitely boost revenue exponentially. The key is to be patient: employee engagement is like branding, very much in the long game yet infinitely rewarding.

Leaders and businesses need to figure out a strategy that is easily scalable and replicable in perpetuity, regardless of who executes. With the multigenerational workforce and the young generation of employees with traits in stark opposition to the Gen Y and X employees, businesses have new HR headaches that only seem to grow stronger day by day.

To stay in control, start assessing the organisation and play the game of reverse-engineering. Where can you start? Simon Sinek, the author of Leaders Eat Last, focused on the ‘why’. Is it in the purpose? Is it in the communication of the purpose of the organisation?

If you’re a leader, you’re in the listening business: start today, and keep it in perpetuity.

This article was published in Human Leader Review, a leadership, management-focused publication to help businesses understand how they can drive engagement and lead the multigenerational workforce today.

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