What are the drivers of disengagement?

• Inadequate total compensation 
• Lack of meaningful work
• Lack of workplace flexibility 
• Lack of career development & advancement 
• Unreliable and unsupportive people at work 
• Unsafe workplace environment 
• Non-inclusive and unwelcoming community
• Lack of support for employee health and well-being 
• Uncaring and uninspiring leaders
• Unsustainable work expectations
• Lack of geographic ties and travel demands 
• Inadequate resource accessibility 

Understanding the true cost of employee disengagement and strategies for improvement

Whether through layoffs, reorganization, or attrition, many companies underestimate the true cost of losing talent, which ultimately results from employee disengagement.

This loss extends beyond the obvious visible expenses, such as severance pay, fees, recruiting, and training new employees. It also includes dips in productivity, poor customer service, low morale, and the gradual erosion of company culture.

Recognizing the full cost of disengagement motivates organizations to prioritize the employee experience.

Employee disengagement is detrimental to both employees and leadership. Beyond the lack of enjoyment, disengagement carries a significant financial burden that impacts a company’s bottom line. Gallup estimated that the cost of disengaged employees reached as high as $550 billion in the US alone.

Sources of disengagement costs

The primary source of these costs is attrition: disengaged workers are more likely to quit, and those who stay often see a decline in performance. The global annual quit rate is now at 3%, a 20-year high.

However, there is good news. While only 32% of U.S. employees were engaged in 2022, some organizations have more than doubled this percentage. These organizations maintained high engagement levels by aligning their business decisions with their organizational culture and values, embracing flexible and hybrid work models, and fostering strong connections between managers and employees. They prioritized performance, collaboration, employee well-being, and customer satisfaction.

Most importantly, they equipped their managers with the skills and tools to have ongoing, meaningful conversations with employees.

Benefits of employee retention

Retaining employees saves organizations both “hard” and “soft” costs, visible and invisible. Keeping talented, skilled employees is not only beneficial for the organization but also reverses the negative cycle for individuals.

When employees feel valued, respected, and supported, they become more productive and motivated, leading to higher job satisfaction and better performance. This results in improved customer service, higher efficiency, and positive employer branding.

Talent is attracted to companies that exhibit high levels of trust, safety, and engagement, which reduces recruitment costs and enhances the workplace environment. Ultimately, no one enjoys being disengaged in their job.

The bottom line? Organizations can’t wait to act. 

People development to overcome talent challenges

Organizations face a critical shortage of talent and skills. Investing in people can create a virtuous cycle that improves the ability to attract, advance, and retain talent.

The talent shortage is a critical problem that is only getting worse. Organizations already face a severe shortage of key talent, and 90 per cent say they will have a meaningful skills gap in the coming years. 

At the same time, digitalization and automation of work activities are leading to further skill shifts, with about 40 percent of Americans and 34 percent of Western Europeans potentially needing to switch occupational groups by 2030.

And with 40 percent of workers planning to leave their jobs, attrition is making it harder to retain skills within organizations.

The bottom line? Organizations can’t wait to act. 

Choose potential, mix of courage and strategy

Companies need to radically change the way they think about talent. Focusing on potential is as important, if not more important, than skills and experience. This is a stance that needs to be adopted in the attraction, recruitment and skills development phases throughout the company.

People development is often overlooked and underused, but it’s critical to attracting talent and driving lasting market advantage. 

Redesigning people’s development is complex and challenging. But it is possible to achieve it. 

It requires acting on shifts in modern employee behavior, keeping pace with the speed and scale of business capability-building needs, and applying the latest innovations in learning technology. 

Jobprofile can help you meet this challenge, whether through career development programmes (Essential, Corporate ladder or Career) or by developing your company’s internal skills strategy.

What’s more, Jobprofile can help you identify your corporate culture so that you can choose targeted and effective actions to develop the commitment and engagement of your employees.