What is Employee Disengagement Costing You? Friday, 12 August 2016

Opinion piece written by Stuart Payne FIEAust CPEng NER, a senior Engineering Manager

Employee engagement has been the topic of some discussion with international research featuring on GALLUP. It seems that globally we are in somewhat of an employee engagement crisis. In Australia, surveys show the state of our workforce as:

  • Percentage of workforce Engaged - 24%
  • Percentage of workforce Not Engaged - 60%
  • Percentage of workforce Actively Disengaged - 16%

To clarify, an “actively disengaged” employee is not only not aligned to your business outcomes (“not on the bus”), he or she is actively working against the business objectives (“trying hard to sabotage the bus”). Psychosocial research by Safe Work Australia has also established a correlation between the actively disengaged, and depression, further underscoring the need to mitigate both. 

The non-engaged workforce are those that turn up and do work, but don’t feel committed to achieve results for the business. While not ideal, these people are of far less negative impact than the actively disengaged.      

But the figure that really caught my eye was the cost of employee disengagement – estimated at approximately AU$70 BILLION dollars annually. In a workforce of 12 million people, that’s a staggering amount per employee.

I believe that the above research and trends are as applicable to the engineering industry as any other, based on my experience.  

Labour costs in Australia have escalated 70% since 2000, while those in the US and Europe have risen by less than half that amount in the same period. It is becomingly more and more difficult for Australian businesses to compete in export markets, and worse, overseas companies see our high domestic costs as a soft target to exploit with cheap exports to Australia.

While the current catch cry for our economic remedy seems to be innovation (a point I agree with), the statistics above strongly suggest we need to also improve employee engagement, to reduce the cost burden of non-engagement.

How do we get our employees engaged? 

We need to actively align people’s work with business outcomes. Part of that is education. Do all of our employees understand what the organisation that they work in does; how it generates revenue; and what their role in the business is? Clearly, this is a pre-requisite.

Senior personnel should be remunerated with an “at risk” salary component or bonus that is subject to achieving meaningful, measurable KPIs reflective of what they are expected to achieve. Their managers need to ensure that these KPIs are well crafted.

Employee Engagement Surveys, while often maligned, are an essential tool to understand the levels of engagement, and areas of disengagement, in a business. Post survey analysis will identify areas of concern, to which employees and management together can be assigned as action groups to discuss and mutually agree ways to improve in those areas. The need to do Engagement Surveys and effective follow-up is so important that it has virtually spurned an industry in its own right. There are a plethora of employee engagement consultants only a google click away, ready and able to conduct this work for companies large or small.

Finally, some tough decisions are required. People need to understand that if they don’t want to actively contribute, they shouldn’t work there. The residual “saboteurs” need to be worked on, and as a last resort, need to be flushed out of the business or they will only further disengage others.

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