What for ยป costs of disengagement

costs of disengagement

Our current levels of engagement in Australian businesses has been estimated to be costing about $54.8 billion per year, according to Gallup.  The costs show up in terms of increased errors, poor product quality and deteriorating customer service levels. It also appears as increased absenteeism, high turnover, workplace conflicts and a general malaise in the work environment.

When people are unhappy at work they start looking for another job.  When they leave they can take with them valuable know-how, networks and sometimes key clients. According to the Australian Human Resource Institute, turnover costs Australian businesses approximately $20 billion each year, with an average turnover rate of 18.5% across all organisations.

These costs come from:

  • Loss of productivity at beginning of employment

  • In-house/external hiring

  • Training/induction of new staff

  • Termination administration

  • Loss of productivity at end of employment

People don't always leave straight away, however. Many choose to stay (even though miserable) because they are angry, waiting for the redundancy payout or wanting to win a fight. Most likely in staying they under-perform. 

This marginal performance costs the business, obviously, but it also costs the person in terms of loss of self-esteem and depression. These costs also impact on our wider society with increased substance abuse, addictions, relationship problems, obesity and other health conditions.  

With a fully engaged workforce we could wipe out our nation’s net debt.

According to Ernst and Young research published in Minds to Work, the under-utilisation of Australian workplaces in terms of untapped potential equates to roughly $305bn. Consider this: in 2015 Australia’s net debt was near $300 billion. 

If you are ready to do something about engagement levels within your organisaton then click here for specific tools.

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