The Cost of Low Employee Engagement

The Cost of Low Employee Engagement

Should you be worried about the lack of employee engagement in your organization?

Employee disengagement can badly hurt your bottom line. Studies show that companies in the USA lose approximately $500 to $550 billion every year.

Let’s take a closer look. A disengaged employee costs you around 34 percent of what they earn. The average annual income of a US full-time salaried employee is $51,480. So, 34 percent of that is $17,503. That’s the amount you lose every year and goes unaccounted for in your balance sheet.

A recent American workforce survey shows that 85% of overall employees are disengaged, and only 30% are looking to grow within their current organization. These numbers are alarming and indicate the extreme level of disengagement in the majority of organizations.

Before deep-diving into reasons for low employee engagement and ways to boost employee morale, let us consider a broad category of employees based on their engagement level.

Levels of employee engagement

We can divide a workforce into three groups based on employee happiness, motivation, and dissatisfaction.

  1. Engaged – They are assets to an organization; highly motivated, passionate, ready to go the extra mile.
  2. Passively disengaged – They come to work only for the paycheck and will put in just enough effort to keep their jobs safe.
  3. Highly disengaged -They are unmotivated and unhappy. Disengaged workers don’t add any value. Instead, they disrupt and affect their co-workers. So much so that when they leave, managers mark them as healthy attrition.

The critical point to remember: all three categories can switch places very quickly. An engaged and high performer can easily get demotivated and move down to disengaged level and vice-versa. Hence, fostering a working environment that promotes positive contributions is essential.

What are the top reasons for employee disengagement?

Lack of employee engagement can happen due to multiple reasons. Below are the top picks:

  • Poor management – Workers don’t dislike the company; they dislike their managers. So if managers are not good, even the best talent can feel disengaged.
  • Communication gap – If employees don’t get adequate opportunities to express their views, they feel stifled and neglected. They lose a sense of purpose and belonging to the organization and stop doing their best.
  • Below par paycheck – Everyone works to earn. Just like an organization is looking for profit every year, employees expect industry-standard salaries and increments.
  • Lack of recognition and rewards – Imagine working hard for an entire year and not being recognized for your effort. People need appreciation and rewards to feel motivated.
  • Overburdened Employees can feel exhausted due to a lack of support, training, and domain knowledge. Often, employees who constantly put in extra hours to finish their work are applauded, but the reason for them working late is ignored. Perhaps the work needs additional resources, tools, or training.

Most factors that cause dissatisfaction among employees crop up due to poor leadership. Leaders and managers must create a healthy and rewarding culture in the workplace. Employee engagement strategy ideas don’t work until there is an honest acknowledgment of the problem and a clearly defined plan of action.

How to overcome employee disengagement?

Follow this three-step approach. The first step towards improving employee engagement is acknowledging the issues causing disengagement. Secondly, strategize accordingly, and finally implement the plan of action. 

Promote transparency

Employees need to feel valued, and transparency helps build trust. A respectful and bias-free workplace is the best platform for highly passionate and engaged employees. There should be genuine motivation for employees to give their 100 percent to the organization.

Regular connects and feedback

Ensure you get the employee pulse as often as possible, apart from monthly one-on-ones and skip-level meetings. Managers should look for ways for informal talks where colleagues can express themselves freely. If you are still stuck with annual employee engagement surveys, try moving to monthly pulse surveys.

After receiving feedback, it is critical to analyze it and take immediate visible action. Once employees start seeing results and changes, they will know they are being heard, and their voice matters.

Recommended Resource: HR Survey Templates

Allow flexibility

Work-life balance is key to employee engagement. Flexible companies thrive because they let their employees do their work conveniently and not force them into strict routines. If an employee has to travel for an hour to reach the office, they might be better suited to work from home instead of wasting time on the road.

Make work enjoyable

“Fun at work” has to be a norm. Organizations need to be creative to break monotonous routines. Employee engagement fun activities in the office are great ways to create a happy workplace. It gives opportunities to employees to interact and get to know their co-workers better.

Don’t forget remote employees

A big chunk of the workforce is virtual and can be easily disengaged if not dealt with properly. Be creative with virtual employee engagement activities ideas, like promoting virtual water cooler conversations, virtual clubs, best use of team chats, and video conferencing tools to keep remote workers’ morale high.


The costs of ignoring employee engagement are high. A happy, motivated, and passionate workforce is key to an organization’s success and maintaining momentum in the longer run.

The best way to keep employee engagement levels high is by acknowledging employee issues and taking immediate action to fix them.

Springworks Team

Building products and tools to simplify the life of an org's HR function in terms of recruiting, onboarding & retention!

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