Michael Specht

A blog from Australia looking at technology, management, Human Resources (HR) and recruitment.

Disengaged Employees cost you US$2246 per employee every year

February 28th, 2013 · 2 Comments · Engagement ·



Profitability drives the actions of all organisation, even not for profits as they at least need to break even, as such senior leadership teams are constantly reviewing regular reports on the health of their organisation through financial, operational and people metrics. Unfortunately a majority of these metrics are looking backward at what took place during the last month, quarter or year.

Especially when you start looking at metrics such as Employee Engagement/Satisfaction which usually result out of an annual survey. Following the actual survey period is at least a month of analysis after which the result are usually distributed back to managers over a period of weeks if not months. Afterwards the long drawn out process of implementing the recommendations takes place. This can actually disengage employees as they do not see positive outcomes from the survey for many months.

At best organisations will have engagement figures that are only 90 days old, at worse over 12 months, resulting in executives using a historical view on the “health” of their largest expense for decision making.

Over the last few years serious financially based research has been taking place around how employee engagement impacts organisational financial performance. Alex Edmans’ most recent findings are:

Companies listed on the “100 Best Companies to Work For in America” generated 2.3% to 3.8% higher stock returns per year than their peers from 1984 through 2011.

Leading expert on employee engagement David Zinger provided an interesting fact; a disengaged employee is actually costing you US$2,246 per year. David’s source as a lovely infograph created by ADP in the US based several different bodies of research. Some other facts from the infograph include:

  • 67% of employees are not engaged, this is less than Australian estimates of around 80% not engaged
  • 49% of employees feel their executive do not create an environment that drive engagement
  • Engaged employees are 87% less likely to leave
  • Removing roadblocks and access to resources can improve employee performance by 25%

It is research like Alex Edmans and figures like the type from the ADP infograph that make it not surprise that switched on organisations take this seriously and are finding year old data on engagement just not “cutting the mustard”. Really switch on ones are doing something about it like Atlassian’s Mood App.

Want more content like this? Subscribe by RSS or by Email.

Tags: ····

2 responses so far ↓

  • 1 Howard Deutsch // Mar 16, 2013 at 10:22 pm

    Thanks for this interesting and useful information. Employee surveys help gather information for increasing employee engagement engagement.

  • 2 Alex Hagan // May 11, 2013 at 7:40 pm

    Hi Michael, Great post. The research on the financial impact of disengagement is interesting too, but the reason for my comment is to support your observations on the timeliness of workforce metrics – 90-day old metrics are ok, but real-time or close to real-time is better. The challenge is how to do that without being intrusive, or measuring so much that you’re actually destroying productivity by having too many surveys and initiatives.