Employee disengagement costs $31.5 billion

TWENTY per cent of Australian workers are actively disengaged at work and this costs the economy an estimated $31.5 billion per year.

Research from The Gallup Organisation has found that actively disengaged employees are less productive, less profitable, less loyal, less likely to provide excellent customer service and are often disruptive on the job. They are also less likely to stay with their current company, with less than 30 per cent of actively disengaged employees planning to stay with their current employer over the next 12 months.

The survey of 1,500 Australian workers, however, found that only 18 per cent are engaged at work and providing their employers with high levels of productivity, profitability and customer service.

Actively disengaged employees, who are physically present but psychologically absent, are unhappy with their work situation and insist on sharing that unhappiness with their colleagues. Disengaged employees have a low level of commitment or achievement and can be disruptive in the workplace, while engaged employees have consistent levels of high performance and are more likely to stay with the company over time.

A lack of clarity around what is expected of employees at work can bring on disengagement, according to Steven Ewin, vice president and partner, The Gallup Organisation. “This requires clarification about why their role is important, and the outcomes for which they are accountable. A job description is not enough,” he said.

Little or no feedback on their performance also contributes to employee disengagement. “Many managers only focus on the negative aspects of an employees performance and forget the positive aspects,” he said. “This can also be tied into a lack of encouragement about an employees development.”

The research also found that only a minority of Australian workers are getting the feedback they need from their manager, while fewer than half of Australian workers receive praise or recognition for doing good work.

One in five Australian employees is extremely satisfied with the frequency of performance reviews they receive from their supervisor or manager, and only 19 per cent say their performance reviews help them do their job better.

Managers who focus on their employees’ strengths or positive characteristics have the most engaged workgroups, with 43 per cent being engaged and only 4 per cent actively disengaged.

Managers who focus on their employees’ weaknesses or negative characteristics in feedback have workgroups that are 33 per cent engaged and 24 per cent actively disengaged.

Absence of any feedback is worst of all, as managers who fail to provide any feedback, positive or negative, have the least engaged workgroups with only 2 per cent engaged and 43 per cent actively disengaged.

The onus rests with each individual manager to address these needs and create engagement at work, according to Anita Pugliese, managing consultant, Gallup Australia.

Placing an emphasis on an individual’s strengths actually increases performance exponentially and, she said, that managers who focus on individual strengths have a competitive edge over managers who either focus on weaknesses or who don’t give any feedback at all.

“When employers effectively tap into their people’s natural talents, they have an instant and constant advantage which cannot be matched by training alone,”she said.

Gallup reached its $31.5 billion estimate of the annual cost of actively disengaged employees through calculating the number of actively disengaged employees in Australia and then applying published statistical guides to the $39,400 per year average Australian salary. This yielded $3,316 in losses/worker (for the total population) that, multiplied by 9.5 million workers in Australia who are 18 years old or older, produced the $31.50 billion estimate.