The Costs Of Ignoring Employee Engagement

To some in management, the fact that their workers get a paycheck from the company is the beginning and the end of any consideration they deserve. That attitude will cost you.

The Costs Of Ignoring Employee Engagement

Recently, in the season finale of the Showtime series, Shameless, the character of Fiona, a 20-something head of household who has been desperately seeking a good, steady income, pulls out all the stops to get a job as a salesperson at a cup-manufacturing company.


And her efforts pay off. She nabs the job and is congratulated by a woman in middle management. That woman then relates how she first sat at Fiona’s current desk 20 years ago when she was hired. Fiona’s joy suddenly turns to shock and dismay, as she eyes the unhappy workers around her in their small cubicles and suddenly feels trapped by the next two decades.

Shameless | Fiona at the cup-sales office

Will she be a happily engaged employee? That scene indicates no–and it’s a scene that’s continually duplicated all across the world at various companies. In these still-difficult economic times, people often jump at any job they can get, without any long-term thought toward whether the position matches up with their personality and skill set, let alone their long-term ambitions in life. Not only that, but many employers feel that employees should be grateful just to be working, not to mention many managers themselves are in the wrong job or don’t really want to be where they are, which translates into a lack of concern for new employees.

Employers and potential employees both have a responsibility to make sure a position is a good fit. Beyond that, however, a company’s style of management bears a great deal of credit or blame as to whether someone like Fiona ends up a happy and engaged worker, or as just another 9-to-5er going through the motions until quitting time.

But as long as the job gets done, does employee engagement matter? Turns out it does, very much. Gallup did an extensive study of the effect of high employee engagement in 2012. They looked at almost 50,000 businesses that included roughly one and a half million employees in 34 countries and discovered that work organizations that score in the top half of employee engagement have double the odds of success of those in the bottom half. Not only that, but those at the 99th percentile of engagement have four times the success rate.

This is the eighth year Gallup has done a study like this, and the results have been remarkably consistent each time. And if you’re wondering what the bottom line with low employee engagement is, it’s estimated to cost the U.S. economy roughly $370 billion a year.


That fact alone is why employee engagement is a major part of my mission and why I contributed a chapter about this issue to last year’s book Women Who Mean Business. High employee engagement is actually critical to a company’s performance and, according to Gallup, it impacts nine key performance outcomes in these ways:

* 37% lower absenteeism
* 25% lower turnover (in high-turnover organizations)
* 65% lower turnover (in low-turnover organizations)
* 28% less shrinkage
* 48% fewer safety incidents
* 41% fewer patient safety incidents
* 41% fewer quality incidents (defects)
* 10% higher customer metrics
* 21% higher productivity
* 22% higher profitability

Obviously, those kind of double-digit increases are impressive and something any manager or business owner would enjoy experiencing at their operation. But how do you influence this type of intangible in a meaningful manner?

I’ve written extensively here about how collaborative leadership is critical to successful management in the 21st century. “Just do your job” may have been the default response to dissatisfied workers in times gone by. But then, as now, that kind of attitude has never inspired any kind of satisfactory improvement.

Acting more as a “chief influencer” rather than a chief executive is in management’s best interest as well as an employee’s because it causes employees to respond in a positive and proactive way to their work challenges.


Here’s more research that proves it: Towers Perrin did a global workforce study that pinpointed the five key areas that increase employee engagement:

1. The organization is the most powerful influencer of employee engagement. In other words, the structure of management systems and processes heavily affect the level of a worker’s interest in his or her job, as I noted earlier.

2. There is no single “right model” for a high-performance culture; the most effective approach depends on an organization’s strategic priorities. We all should avoid a “one-size-fits-all” approach to influencing workplace attitudes; obviously how a corporation like Apple manages its culture is going to be different from how a company like J.C. Penney does things. Which may be one reason why this didn’t work out too well.

3. Employees are eager to invest more of themselves to help the company succeed, but want to understand what’s in it for them. If workers feel they have no road to advancement or achievement, that’s a big turn-off when it comes to engagement. What’s the point in trying harder if there’s no end game in sight? Who wants to play a game where there’s no way to win?

4. Senior leaders need to make the leap to a more inspirational and engaging style of leadership to help drive higher engagement. The more management makes an honest and meaningful effort to connect and motivate workers, the more workers will feel connected to the company and its goals. When, instead, orders are just sent down willy-nilly without explanation, employees feel like disposable cogs in a machine.


5. Companies need to understand their employees as well as they understand their customers to design a work environment and experience that will drive higher engagement and performance. It’s not at all unfair to view your employees as “customers.” You motivate customers to buy more by engaging with them and anticipating their wants and needs. Well, it’s not much different with those you manage; you motivate your staff to achieve at a higher level through the same process.

A big secret of success for any relationship, personal or professional, is to personally demonstrate a high degree of caring about the other person. To some in management, the fact that their workers get a paycheck from the company is the beginning and the end of any consideration they deserve. That attitude, however, ends up turning off employee enthusiasm–as well as ultimately harming the bottom line.

And speaking of that bottom line, always remember: employees are your most valuable asset.

[Image: Flickr user Florian | Shameless Image: Showtime]

About the author

As President of PeopleClues, Julie is responsible for leading the organization to meet global objectives. During the past 21 years, Julie has become a nationally respected authority on practical business applications of assessment technologies. As a high-level manager in a $5 billion, 160-branch division of a Fortune 100 company, Julie gained a perspective on the complex workings of a major corporation