Leadership News

How much does employee disengagement cost

How much does employee disengagement cost you and your organization? 

Posted on March 23, 2021 by kozmun

The Management Journal’s semi-annual Employee Engagement Index reports that 60% of employees are not engaged, and 15% are actively disengaged at work and only 25% are actively engaged.

According to Forbes, the costs of a disengaged employee is equivalent to 34% of their annual salary, or $3,400 for every $10,000 of income.

If we applied this to the average Canadian salary of $55,800 a year, the costs of a single disengaged employee to the business is going to be $18,972 annually. 

Let’s apply this to an entire organization:

Let’s say you lead an organization of 100 people.

If we use the Employee Engagement Index which states only 25% of employees are actively engaged, then 75 employees are disengaged at your organization.

If we use the average salary of those employees as $55,800 then this employee disengagement is costing your organization annually:  $1,422,900 ($18,972 X 75 people.) 

Are you surprised by the magnitude of this cost? What is the actual cost to your organization? Are you OK with the return on this investment? 

This example demonstrates that there are concrete costs due to employee disengagement. What actions are you going to take to re-engage with your employees?

While there is no quick fix, there are simple leadership practices that can produce immediate improvements in engagement.

Our Engage and Mobilize Employees Program focuses on simple but powerful behaviours that will have maximum impact on a leader’s ability to engage his or her employees.

For program information, see the Engage and Mobilize Employees.

To register for the Engage and Mobilize Employees program, contact Kathleen at 306-717-4471.

Your organization may be eligible for funding through Re-Open Saskatchewan Training Subsidy. Employers receive 100% reimbursement for approved training up to $10,000. Deadline to apply for this Training Subsidy is March 31, 2021.

By Kathleen

Team Strategist and Leadership Coach helping leaders achieve business improvements thru change leadership, teams & processes that build competence, connection & commitment.