Employee Disengagement is the SILENT KILLER!

Employee engagement is a popular topic these days.  And for good reason.  Employee engagement has been staggeringly low for many years (although there has been some improvement in it lately).  I will talk about employee engagement in a future blog, but this post focuses on EMPLOYEE DISENGAGEMENT.  While engagement can certainly lead to success, employee disengagement is the silent killer!  It can doom your business.  We will explore several reasons why this is such a big problem.

It Kills Revenue

If customer-facing employees are disengaged, you can guarantee they will have a negative impact on your revenue.  And this is not limited to just salespeople.  Imagine if you have a technician working on the customer site and he is actively disengaged.  He speaks negatively about the job and the company.  His attitude is poor.  He carries a chip on his shoulder.

As he works with the customer, his displeasure with the company becomes apparent.  It causes doubt in the mind of the customer.  They are not sure if they want to continue working with you.  Over time, they end up taking their business elsewhere.

It Kills Quality

Think of that technician.  If he doesn’t care about the company then he probably doesn’t care as much about the results.  He is not going to be concerned about the long term relationship with the customer.  He’s not likely to stay late to make sure the job is finished correctly.  And he certainly isn’t going to go the extra mile that is often needed to build repeat customers.

But it is not limited to the technicians and other customer facing personnel.  This can be a problem with the back of house staff as well.  The accounting clerk that messes up the invoice can leave a negative impression on existing customers.  The receptionist who takes phone calls (if you still do that) can negatively impact the new prospect’s experience.

It Kills Culture

Peter Drucker said “Culture eats strategy for breakfast”.  Others have jumped on this and requoted it in various ways.  There’s even a book “Culture Eats Strategy for Lunch”.  What does this mean?  Simply put, no matter how great your strategy, if your culture doesn’t support that strategy, you will never be successful.

When I talk about culture, invariably someone will point out a company who is successful yet has a bad culture.  It’s negative, the work is miserable, the hours are long, etc.  There may be a variety of reasons.  Most likely, the culture actually does support the strategy.  Most likely, the strategy of the company is driven by something other than a higher purpose.  For example, if a company’s strategy is all about making money, they will likely attract people who only want to make money.  I’ve seen this.  And in these companies, employees who are driven only by financial returns will work in a horrible environment if it means making good money.  Employees who look for a higher purpose or aren’t driven only by financial motives end up leaving.

If employees aren’t engaged in your company and connected with its higher purpose, they will become disenchanted and will eventually leave.  But before they do, they will eat away at the culture of the company.  That is why we recommend screening candidates carefully for the best fit, even if it means missing on some candidates that are looking for the first offer.

Increases Turnover

Lack of engagement leads to higher turnover.  In some industries, turnover is close to 100%.  I recently talked to someone in the long-term care industry that was facing this kind of turnover.  Unfortunately, they were essentially looking at turnover as an issue of compensation.  The reality is that they were not getting employees engaged in the business.  In fact, because of the high turnover, they were training them slower than before in order to not invest too much in them in the first 90 days.  This seems counterproductive to me.

The cost of turnover is staggering.  The cost of turnover of an entry-level person is as high as $5,000.  Turnover in positions with a salary of around $50,000 will cost, on average, about $16,000.   If a company has 100 employees and has a 50% turnover, the cost of turnover alone will most likely be more than $250,000 per year!

Increases Costs

Besides turnover, lack of engagement increases other costs as well.  Some of these are soft costs, such as productivity.  If employees aren’t engaged, they aren’t likely to work as hard.  They won’t put in the extra hours.  They will not learn and they certainly will not excel at their position.

Additionally, there are hard costs as well.  They will be more wasteful.  They are less likely to focus on saving the company money and will most likely be looking to get everything they can out of the business.  I have seen salespeople who were actively using their time and entertainment budget in order to expand their network and hopefully land their next job.

Increases overall Stress within the company

Le’ts face it.  Working with disengaged people is not fun.  And when your team has an actively disengaged member, they will be a source of stress to every member of the team, not just the manager.  Actively disengaged people are a virus in the organization.  By the time they leave, they will have infected many other team members.  Leading to more disengagement, and more problems in the future.

Whether it is complaining, not carrying their load, creating drama or just being a “Negative Nelly”, an actively disengaged person will create dissension and lead to greater stress on the entire team.

It is your competition’s greatest ally

When you have a team member that is actively disengaged, they are likely a source of negativeity outside of the company as well.  As they come in contact with suppliers, business partners, and customers, their negativity will have an impact on them as well.  This can impact existing relationships and could impact long-term relationships you have with key constituents.

I have seen this in my past.  In one organization a sales engineer was complaining to one of our suppliers.  That supplier came to me and expressed concern as to whether we could continue to support their product.  Fortunately, the supplier came to me first and I was able to rescue the relationship.  But if he had not, he may have sought out another business partner and ultimately taken business away from us.  This actively disengaged person was intentionally sabotaging relationships in order to position himself for a future role with a competitor.  Fortunately, I was able to head that off.  (And ultimately gave him that chance to work with a competitor)….

Job #1 of a Leader – Keep Your Employees Actively Engaged

In a future post, I’m going to contrast disengagement with employee engagement.   Employee engagement is your SECRET WEAPON!  It’s the complete opposite of Employee Disengagement, which, as I have pointed out, is the SILENT KILLER!

The old paradigm said “If employees take care of the business, the business will take care of them”.  The new paradigm, espoused by leaders such as Richard Branson, says “If you take care of your employees, they will take care of your business”.

Avoid the pain and suffering that comes with employee disengagement.  I have a four-step model I would love to share with you.  This model starts at the beginning (recruiting & hiring) and works all the way through succession planning.  If you would like to know more, I would love to tell you more about it.  Connect with me on Linked In, or send me an email.