Ever wondered what you’d do with £340 billion?
That is the estimated figure that disengaged employees cost the UK economy! £340 billion every year in lost training and recruitment costs, absence, productivity, creativity and innovation.
Here’s the facts:
- Research undertaken by CB Benefits revealed that on average a disengaged employee costs their employers between £3,400 and £10,000 in wasted salary per annum compared to an engaged employee.
- 61% of the UK working population admits to being disengaged – “with no enthusiasm, passion, or emotional commitment to their company”
That means for a workforce of 5,000 people the minimum potential financial loss is £10 million…
5,000 employees x 61% = 3,050
3,050 x £3,400 = £10,370,000
On average, highly engaged teams will experience a 40% improvement in turnover. This improvement can vary from 24% in high-turnover organisations to 59% in low-turnover organisations. You can find more details about this in the Gallup Q12 Meta-Analysis Report.
Employee engagement is not just a “nice to have” – it directly impacts the bottom line!
The four main areas of impact are as follows:
- Profit – according to a recent UK government report, companies with low engagement can have 33% less turnover than companies with high engagement. This is hardly surprising when teams with disengaged employees sell 20% less than teams with highly engaged workers.
- Customer experience – it doesn’t take rocket science to realise there is a direct correlation between low engagement and customer service. If an employee doesn’t take pride in their work, isn’t an advocate of the brand, and is generally demotivated, then this will lead to poor customer service. In fact, disengaged employees make 100 times more errors than their engaged colleagues.
- Retention – it costs approximately 20% of a salary to recruit an employee and another 7% to train them up. As time goes on, the cost of losing that employee and having to hire another one increases due to additional training. Keeping employees engaged gives a company the best chance of retaining its staff.
- Absence – disengaged employees take 2 times the number of sick days of engaged employees and a PWC report in 2013 found that sick days cost UK organisations nearly £29 billion a year. This not only impacts the operation of the business, but also the morale of engaged members of the team.