The impact of a low-engaged workforce on a company’s bottom line

Low-engaged workforce

The impact of a low-engaged workforce on a company’s bottom line

At peoplevalue, we believe a business’ team members are one of its most important assets. It is, after all, the people who make up a company who are the driving force behind its every achievement. It’s, therefore, no surprise that a low-engaged workforce will directly impact your business’ culture, bottom line and overall success. 

When employees are engaged, they’ll be more invested in their role and more motivated to reach goals and get results. They’re also more likely to be an advocate of your business and its mission and spread positive messaging to their peers day-to-day. Low-engaged employees, on the other hand, have the potential to negatively affect your business in a number of different ways – including its bottom line and company culture. It’s therefore critical that managers are aware of the factors that can lead to a low-engaged workforce and the detrimental implications this can have and find ways to ensure their team members remain happy, motivated, and engaged at work. Let’s explore this further:

What is a Low-Engaged Workforce?

A low-engaged workforce is a team of people who aren’t emotionally invested in their work. There are many reasons why this might happen, including feeling undervalued or unappreciated, having too much or too little direction from managers, lack of growth opportunity, and a mismatched culture fit. This will often result in them losing focus and motivation, becoming indifferent about individual and organisational success and even high absenteeism rates. As you can imagine, this will naturally impact a business’s output, bottom line, and the morale of other team members around them, which can be incredibly costly in the long run.

The Financial Impact of a Low-Engaged Workforce

When an individual or team isn’t engaged with their work and lacks drive, this will become evident in their productivity levels and output. Low productivity indicates that they’re not utilising their skills to their maximum potential, increasing the company’s resourcing costs and directly and negatively impacting its bottom line. This can be a real challenge for business growth.

On top of this, there’s a direct correlation between employee engagement and customer satisfaction. Engage for Success suggests that highly engaged workers result in high customer satisfaction and spending. When individuals are authentically proud and passionate about what they’re selling, they significantly influence customer outcomes. In terms of the quality of product or service delivered by a low-engaged employee, studies have shown that disengaged employees make 100 times more errors than engaged colleagues. This will result in more wasted resources and could impact whether a customer will be one-time or recurring.

One of the biggest costs a low-engaged workforce has on a business’ profitability is high turnover rates. When you total up recruiting, hiring and training expenses and the impact of a high turnover rate on current employee morale and the challenge of attracting new talent in such a competitive market, losing employees can significantly impact your business’s financial status. Therefore it’s in your business’ best interest to ensure it retains talent by ensuring its employees are satisfied and engaged.

The Morale Impact of a Low-Engaged Workforce

Now that we’ve explored why a low-engaged workforce could negatively impact a business financially, let’s look at another reason why disengagement can be costly: its impact on morale. When one or a handful of individuals start to disengage from their work, perhaps because they don’t feel challenged enough or appreciated for their work, they could be liable to spreading negative feelings about the company to their co-workers. This can cause a harmful ripple effect and negatively impact team morale, workplace culture, and engagement as a whole. The key is to know the tell-tale signs that an employee’s engagement levels aren’t where they should be and intervene before it’s too late. Let’s find out how businesses can boost their team’s engagement levels:

How to Increase Employee Engagement

In order to have greater visibility of all of your employee’s engagement levels and work to improve them, a business-wide employee engagement strategy is key. This will essentially tie together all of your engagement activities and help establish a positive emotional connection between your people and your business’s values, purpose, and goals. Two-way communication is crucial in understanding why your employees feel disengaged and what solutions you can put to combat this. For example:

Are your employees feeling under-challenged or unable to progress in their role?

Offer learning and development opportunities.

Finding the optimal amount of challenge at work is important to keep employees stimulated and working to the best of their capability. Ensure managers are checking in with their teams on a regular basis to discuss what their personal goals are. Work together with them to reach these goals through a variety of learning and development opportunities such as mentorship programmes and training schemes. 

Are your employees feeling under-appreciated?

Launch a reward and recognition scheme.

If an employee feels under-appreciated for their work or that they aren’t receiving recognition as frequently as they’d like, try introducing a formalised, long-term reward and recognition programme. If your team are receiving timely and consistent feedback on their work, they’re more likely to be motivated, driven and engaged on a day-to-day basis.

Are your employees struggling in their personal life or with their health or finances?

Provide shopping discounts and wellbeing tools.

Whether your team members are struggling to deal with increased living costs, have a health concern or perhaps are dealing with a grievance, offering resources such as shopping discounts, on-hand therapy and discounted healthcare services will ensure they feel supported and valued – and therefore more engaged. 

Read more about creating and managing an effective business-wide employee engagement strategy here.

Final thoughts

To summarise, engaged employees may be the greatest competitive advantage any organisation can have. If not dealt with effectively, a low-engaged workforce can hugely negatively impact company morale and its bottom line. It’s therefore crucial for businesses to invest in their people and create an effective employee engagement strategy that will boost engagement business-wide. 

Find out more about the employee engagement solutions we offer over on our employee engagement hub.

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