3 Unexpected Costs of Poor Employee Engagement

Despite an increased focus worldwide, many organizations still struggle with employee engagement. Deloitte University Press recently published its Global Human Capital Trends 2015 report, which found that “87 percent of organizations cite culture and engagement as one of their top challenges.”

This is a challenge worth solving, and not just because building an engaging company culture is ‘the right thing to do.’ There are massive costs associated with poor employee engagement. Some of those costs are clear as day, but a surprising number of these costs aren’t immediately obvious.

Here are just three of the many unexpected costs of poor employee engagement that could be adding up as you read:

Disengaged Customers

Poor engagement is contagious, and it doesn’t just spread from colleague to colleague. Employees naturally exude their level of emotional commitment to an organization and its goals. It’s nearly impossible to fake. When customers interact with a disengaged employee, they’re not experiencing the best an organization has to offer. In some cases, they’re experiencing the very worst.

Think back to the last time you interacted with a visibly disengaged employee: did that interaction inspire an emotional connection to their organization?

Now think back to the last time you interacted with a genuinely engaged employee. In most cases, the difference in your experience as a customer is dramatic.

Safety Incidents

The effects of poor engagement aren’t limited to companies with customer-facing employees either. Recent research by SHRM shows that employee engagement has a considerable effect on safety incidents as well.

In addition to the potential costs of breakage and property damage involved with safety incidents, the costs to an organization skyrocket if someone is injured.

Their lost productivity is compounded by the additional workload and stress shouldered by the rest of the team. You’re not just losing the productivity of one employee during an unplanned absence; you’re losing the productivity of several.


There’s a noteworthy difference between taking a planned vacation, and unplanned absences.

Planned paid time off is valuable for both employers and employees. Employees get the time they need to to participate in fulfilling activities, or spend quality time with friends and family. Employers get a well-rested employee, ready to take on their tasks with renewed vigor and enthusiasm. Because it’s being planned in advance, the logistical challenges posed by employee’s absence are much smaller. It’s a welcome trade-off.

Unplanned absences are considerably more costly. A recent SHRM report found that “Unplanned absences led to the greatest perceived productivity loss compared to planned and extended absences.” These costs include but aren’t limited to morale damage, increased workload, additional training costs, and decreased quality of work.

Whether an unplanned absence is caused by a safety incident, or a deliberate choice to avoid the work environment, it’s less likely to occur in highly engaged employees.

The Cure

You can mitigate, and even eliminate many of these costs with an effective employee engagement strategy, and that strategy is largely dependent on strong leadership.

As the Deloitte report explains, “Engagement starts at the top.”

To enact any meaningful change in employee engagement, it takes a leadership team willing to implement an employee engagement program, measure its effects, and take action based on those learnings.

How are you working to build and support engagement in your organization?


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