by Olueh Aboyowa & Loralyn
Before Amazon became the biggest retailer, that title was held by Sears, the retailing brand of choice for most households in Canada and in the US. The company gained notoriety as a favorite purveyor of goods via its catalogue which was mailed annually for over a century, sort of the print version of Amazon as we know it today. At its peak, more than seven million were printed each year until the last one was issued in 1993. More than 100,000 items were available in the catalogue and annual sales from it topped $12 million.
Today, the retailer holds a place on the list of most tarnished brands with infamy gained for their failures rather than their accomplishments. All the accolades earned in its 129-year run have been stripped way. Sears is currently categorized as the “worst retailer and company in the US.” One of the major reasons for the company’s collapse was disengaged employees who cited dismissive management and a toxic work environment. Let’s dig into why that may have happened.
What is Employee Engagement?
Employee Engagement is a metric which describes how employees are interacting within their workplace. It includes their enthusiasm for work, their commitment to their employer, their interaction amongst colleagues, and how actively they are participating in internal and external initiatives. This is an important metric that every organization must measure because engaged employees produce better business outcomes than disengaged employees. Effective leadership is a key factor in fostering employee engagement, and organizations must prioritize developing strong leaders to drive engagement. According to 2021 research by Gallup, 48% of working Americans are actively looking for jobs today. The research showed that the high number is not a reflection of a particular industry, pay, or roles. Rather, it is a new challenge in the workplace that has surfaced in the COVID era.
There are three categories of employee engagement:
The Engaged Employee – these people are excited about their work, they generally love their jobs, enjoy working with their colleagues, and contribute directly to the success and progress of the organization. Unfortunately, in the US, only 36% of employees fall under the “engaged” category.
The Not Engaged Employee – these are people who deliver the bare minimum of whatever they have to do just to check the box. This majority accounts for a whopping 71% of the global workforce. Exacerbating the challenge is that “not engaged” employees tend to bring morale down and contribute negativity (i.e. toxicity) to the workplace.
The Actively Disengaged Employee – these people are so miserable at their jobs that they have essentially checked out. They may show up for work. Or not. And, when they’re at work, they’re scrolling social media, actively seeking and applying to other jobs during the hours that their current employer is paying them to work. They are openly disgruntled and dismissive of anything to do with their employer, actively planning when they’re going to leave. This phenomenon is sometimes referred to as “quiet quitting,” where employees disengage without making their intentions known.
Employee engagement, or a lack thereof, doesn’t happen by accident. There are basic decisions and initiatives that transpired within the organization which caused employees to be either engaged or disengaged. Remote onboarding and work from home (WFH) have combined forces to yield a polarizing effect: some employees love WFH, and their engagement has soared. On the other hand, some employees have fully disengaged feeling out of sorts with the new rhythm of working in isolation, zoom fatigue, and being unable to manage the newly blurred line between work life and home life. This disengagement can have a significant impact on the productivity of these employees, and by extension, the productivity of the entire organization.
What are the Causes of Employee Disengagement?
There are three primary drivers of disengagement. For some people, a lack of proficiency in soft skills is a factor that heightens that disengagement. The causes are:
- Poor Management – the biggest decision that affects your organization is leadership. Ineffective managers have been cited as a leading cause of employee disengagement and dissatisfaction. You can let your culture evolve based on whomever is leading OR you can cultivate a specific culture by selecting the leadership you want. When the wrong person is in charge, and if they lack the necessary soft skills to lead people, you can expect your workers to disengage. A manager must provide professional development opportunities and possess an adequate set of social skills. One of the main reasons for failed employee engagement is that ineffective leaders are unable to build relationships with their staff; many have poor communication skills, so, rather than converse and interact, employees choose to withdraw from their leader and each other.
- Employee Engagement is Assigned to a single Department – most organizations think that the job of motivating their workforce and getting them excited about work is strictly for the HR department. Not so. Employee engagement is the responsibility of every department, every leader, and every employee. Creating a healthy workplace takes work and coordination across all departments. Certainly, HR may be tasked with leading the effort but they do not solely own the responsibility for fostering employee engagement.
- Lack of Professional Development Opportunities – for most people in the workplace, job satisfaction comes from employees having the opportunity to learn new things. They want upward mobility, too. Leaders are tasked to steer us in the right direction. When this desire is not fulfilled, employees become disillusioned with work and often resign to find the growth opportunities they want elsewhere.
What is the Financial Cost of Disengaged Employees?
As in the case of Sears, disengaged employees are driving businesses to bankruptcy while gulping a large chunk of a company’s finances in the interim. Disengagement fuels toxicity which infects morale and slowly erodes the company’s culture. The annual losses to business are massive.
- Since disengaged employees have lost interest in their work, your company loses productivity. The financial cost of that loss of productivity is about 18% of your employee’s annual salary.
- The cost of keeping a disengaged employee employed with you is about $9,000 yearly while it will costs you between $25,000 to $100,000 to replace them.
- If you have more than 10,000 employees where the average salary across that pool is $50,000, disengagement could be costing you in excess of $60 million dollars per year.
- Turnover will be high. And when there’s churn, there’s dissatisfaction, low morale, and even toxicity. Churn costs American businesses over $600 Billion per year – and that statistic was pre-COVID.
Is there a solution?
Maybe. Having actively engaged employees is possible, but you it’s going to take vigilance, a commitment to change, and some level of investment. Your employees need tools to navigate the workplace fostering networking, effective communication, talent development, and social-emotional intelligence. Training employees on soft skills including leadership development can make a difference; it all depends on your budget where executive coaches average about $400 per hour – or you could do something more affordable leveraging a platform like the one developed by STEERus. We create a customized curriculum for your employees – or they can learn via the journeys that we already have within our Soft Skills Academy. Perhaps you want everyone on your team to get on the same page. If so, consider a group training workshop.
Initiatives like these, coupled with efforts to engage employees that begin by listening to them, can help your turn your workplace around. Remember, actively engaged employees create a positive ripple effect that you will feel across all aspects of your organization from productivity to morale to retention to revenues. Engaged employees are healthier, perform better, and are more resilient!
Photo by Andrea Piacquadio from Pexels