Employee Disengagement: Foundations, consequences, and calculations

Employee Disengagement

Before we talk about employee disengagement, here's a primer on engagement. Bakker et al. (2014) as cited in Lemmon et al. (2020) suggest the following 3 items as defining employee engagement in the workplace:

  1. The personal energy of the employee is applied to their work
  2. A sense of connection exists between the employee and the work
  3. An enjoyable challenge, where the employee can be "in the zone," accompanies the work

Internal and external factors can positively influence, or distract from, each employee's experience. And, these contribute to their levels of engagement or disengagement.

Disengaged Employee

What Leads to An Employee Being Engaged?

About Employee Engagement.

Employee engagement isn't a trait that follows employees through their careers. A person, highly-engaged in 1 company, could be disengaged at another. This is true even when the 2nd company appears similar. In the case of employees deemed "lazy" by the 1st company's managers, it's not unusual that they move on to thrive in others.

In light of this, employee engagement is a product of the workplace environment. And, while some employees seek engagement, it's the responsibility of the organization and its leaders, not the employees, to nurture it into being.

Building a Culture of Engagement.

It's great when a company is intentional about cultivating an organizational culture that fosters employee engagement. Yet, some are able to achieve this accidentally. Typically, this is because of the skills, habits, and actions of their executives and managers. This speaks to success in hiring, yet also highlights the importance of leadership qualities.

For the companies encountering issues in developing their desired culture, there's good news. It's commonly accepted that the muscles of leadership can be trained and developed. So, through appropriately-selected training and application of new knowledge, your managers and employees can upskill in ways that will have positive benefits.

Employee High Five

Leadership Skills that Build Employee Engagement.

Given the above, here are 3 leadership skills that help managers create work environments supporting employee engagement:

One.

Intercultural competence

Diverse Workforce

Recognition of the diversity of perspectives existing across cultures, and appreciation & willingness to tailor communication and actions to account for differences, while striving for mutual understanding and respect.

Two.

Emotional intelligence

Emotional Intelligence

Awareness and control of one's emotions, and awareness of the emotions of others.

Three.

Communication

Channels of Communication

An ability to craft & deliver information, using several channels, so stakeholders' understanding is maximized, and opportunities exists to provide feedback.

Organizational Programs, Services, and Benefits.

It's a misconception that salary, or increase to it, creates or maintains employee engagement. With this in mind, organizations must turn to other areas for mutually-beneficial solutions. Leaders must be well-equipped. At the same time, organizations must provide programs, services, and benefits that lend to employee engagement.

However, in the same way that following Steph Curry's training program won't put me on an NBA team next year, copying what's worked in another company may not yield results for your organization. In both instances, assessment of needs has been skipped, leading to solutions that aren't aligned.

While that's the case, here are 3 options that organizations might consider, given the results of an assessment, considering the uniqueness of their workforce:

One.

Professional Development

Workforce Professional Development

Help employees grow in current roles & prepare for new ones. A culture of continuous learning lends to engagement and innovation.

Two.

DEIB Programs

Workforce Diversity Programs

Diversity, equity, inclusion, and belonging initiatives help organizations bring a variety of people to the table, hear and value their voices, and create environments where employees look forward to Monday mornings.

Three.

Communication

Organizational Communication Initiatives

Addressing how employees receive information, who presents it, through which channels, when, and how feedback is received and applied is key to enhancing the employee experience.

Consequences of Disengagement.

If engaged employees are attending to work that's aligned with organizational goals and productive in their efforts, what are disengaged employees doing?  What are they producing? Are they doing work that's "good enough?" Or, are their work and presence providing a negative consequence for the organization?

Thamizhselvi (2014) suggests the following as disengagement's negative impacts:

❌ Increased complaints about engaged employees by disengaged employees

❌ Elevated absenteeism and tardiness among disengaged employees

❌ Waning interest in the company & missed project deadlines

❌ Rising turnover of talented, disengaged employees

❌ Reduced productivity of disengaged employees

Negative Trend

Measuring Employee Disengagement.

Employee NPS

The level of disengagement, in an organization, can be measured via a simple, 2-question, Employee Net Promoter Score Survey.

  • 9's & 10's are your promoters
  • 7's & 8's are passives
  • 0's through 6's are your detractors

The Formula:

  • % Promoters - % Detractors = Employee NPS
  • % Detractors = Disengagement rate
Employee Net Promoter ScoreExample: Question 1 in a 2 question employee survey to measure employee disengagement.

Here's An Example:

Calculate the # of Disengaged Employees.

With the Employee NPS and disengagement rate having been determined via your email survey, you'll take the disengagement rate and multiply it by the total # of employees in your organization. The result of this calculation is the total # of disengaged employees. For this example, we'll use 1,500 employees and an ENPS of 20 (35% promoters, 50% passives, 15% detractors).

  • 1,500 x 15% = 225 disengaged employees

Calculate the Average Cost Per Disengaged Employee.

With the # of disengaged employees calculated, you'll need to find the average cost per disengaged employee.

To do this, take your company's median salary and multiply it by the average cost of employee disengagement.

Estimations of the average cost of employee disengagement range from 18% to 34% of an employee's salary. For this example, we'll use 26%, the average of the range, and $75,000 as the median salary.

  • $75,000 x 26% = $19,500

Terminology Refresher.

  • Mean - the average of the given numbers
  • Median - the middle number
  • Mode - the number that appears most often

Calculate the Total Annual Cost of Employee Disengagement.

In this final calculation, you'll multiply the average cost per disengaged employee by the total # of disengaged employees.

  • $19,500 x 225 = $4,387,500

What Improvement Looks Like.

We don't want the organization in our example to lose $4M+ to employee disengagement, and neither do its leaders. They're all-in on finding the root causes and making the necessary changes. Here's what improvement looks like with a shift from an ENPS of 20 to 32.

Original

Promoters: 35%

Passives: 50%

Detractors: 15%

ENPS: 20

Disengaged Employees: 225

Avg. Cost per Disengaged Employee: $19,500

Total Annual Cost of Employee Disengagement: $4,387,500

---

Improved

Promoters: 40%

Passives: 52%

Detractors: 8%

ENPS: 32

Disengaged Employees: 120

Avg. Cost per Disengaged Employee: $19,500

Total Annual Cost of Employee Disengagement: $2,340,000

Reduction in Annual Cost of Employee Disengagement: $2,047,500

Consider the Value of Improvement.

How much more impact could the company in our example make by reducing their total annual cost of employee disengagement by over $2 million? What would this mean for its employees and their families? What would this mean for its clients? What would this mean for its future sustainability and innovation?

Here's What To Do Next.

Net Promoter Score

I encourage you to run an Employee Net Promoter Score Survey in your company. It's a simple, 2-question survey that doesn't require heavy lifting in distribution or significant data analysis. You'll be able to take the results and run through the calculations with ease.

This process and its results give you a baseline of the level of disengagement and associated costs. What they don't give you is a root cause analysis suggesting how to approach improvement.

Would You Like My Help?

If you'd like my help in conducting an Employee NPS Survey, or if a more comprehensive Change Readiness Assessment sounds like it'd help, contact me today to start the conversation.

In health,
Boh

David Bohmiller

David Bohmiller, MBA, MS (he/him/his)
Founder, CEO and Consulting Executive
Inevitabl LLC

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References: Lemmon, G., Jensen, J. M., Wilson, M. S., Posig, M., & Thompson, K. T. (2020). Engagement as a Privilege and Disengagement as a Pathology. Journal of Management Inquiry, 29(2), 220–235. https://doi-org.ezproxy.snhu.edu/10.1177/1056492618775842

Thamizhselvi, M. (2014). Innovative Hr Practices in Employee Engagement. CLEAR International Journal of Research in Commerce & Management, 5(4), 70–72.

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