If employees don’t like their boss or aren’t stimulated by their work, can that lack of enthusiasm weigh on a company’s bottom line?
That was the question that Gallup set out to answer in a new study that compared workers by categorizing them in to three groups: “engaged” workers, those who are passionate about and committed to their work; “not engaged,” those who are coasting; and “actively disengaged,” those who are disruptive and counterproductive.
Across a variety of metrics, there were stark differences between the most engaged and least engaged workers in the effects they had in the workplace. The findings led Gallup to conclude that many U.S. employers would benefit from revamping their human resources strategies.
Gallup studied the level of engagement across nearly 50,000 business units nationwide. To determine how committed workers were to their jobs, the researchers asked participants to respond to statements such as “My supervisor, or someone at work, seems to care about me as a person,” or “At work, I have the opportunity to do what I do best every day.”
They found a sharp disparity on dollars-and-cents outcomes between the top quartile of respondents — those who were most engaged — and the bottom quartile, those least engaged.
Engaged work units were 22 percent more profitable. They also had 48 percent fewer safety incidents, 41 percent fewer quality defects and 28 percent less “shrinkage,” or employee theft. Among high-turnover organizations, there was 25 percent less turnover in the most engaged work units. Among low-turnover organizations, there was 65 percent less turnover.
Also, the customer ratings for engaged work units were 10 percent higher. “If someone’s taking care of me as an employee, I’m more likely to reciprocate with a customer,” said Jim Harter, the chief scientist for Gallup’s workplace management practice.
Using assessments of how engagement relates to productivity and how productivity translates into dollars, Gallup estimates that actively disengaged employees cost the United States $450 billion to $550 billion a year. It also projects that the most disgruntled employees — those in the actively disengaged category — make up 20 percent of the nation’s workforce.
The correlation found in Gallup’s study between employee engagement and outcomes on a balance sheet raises question of whether the former causes the latter. Perhaps the momentum and energy of a successful enterprise are driving employees to be more motivated, as opposed to the other way around.
Harter said that he has examined this question in longitudinal workplace studies and that he has found engagement predicts these favorable financial outcomes more often than the outcomes predict employee engagement.
“There is somewhat of a reciprocal relationship,” Harter said, but “it’s not as strong that direction as it is the other one.”
In an era when offering lavish employee perks has turned into something of an arms race, Harter cautioned that it’s important to note that a happy workforce is not the same as an engaged workforce.
“Happiness is more of a state. When people come to work happy, they may or may not be productive,” Harter said. “Engagement is more focused.”
The study did, however, find a correlation between flexible work schedules and engagement, which could suggest that some types of perks play a role in keeping staffers focused and productive.