Matter & Substance
  June 5, 2015

The True Cost of Employee Disengagement and Turnover

I have a friend that was recently discussing her job with me. Although she has just started, she has found that it is a toxic environment. The owner/CEO rules the company in a very authoritative and controlling way. He is unable or unwilling to consider any viewpoint other than his own.

I am sure that many businesses are operated in a similar manner. Few business owners understand what this can cost them.

The largest cost that a company can have is disengaged employees. This cost is far in excess of their payroll in that these employees are often engaged with customers, vendors, and other stakeholders. The negative attitude of disengaged employees will adversely affect all of these things. Ultimately, all of this hurts the bottom line.

This type of environment inevitably leads to turnover. When an employee leaves a company, there is an immediate loss of the investment in that person's recruitment, training, and functional knowledge. There is also the added cost of finding and training a replacement, not to mention what this can do to the morale of other employees. In some instances, the remaining team members just have to somehow pick up the slack. These costs are significant, but rarely measured.

Your entire business suffers from a lack of employee engagement. Think of a situation where you have asked an employee at a large hotel for directions. The engaged employee will be sure that you get there and in many instances take you there personally. The disengaged employee will leave you further confused, and you, the customer, suffer as a result. Many business owners might operate differently if they fully understood what employee disengagement and turnover are actually costing them.