Statistics Around Employees Not Being Engaged
Dissatisfied employees are increasingly disengaged and will eventually quit. This costs companies several thousands of dollars as they do not perform at their optimum. The company incurs the employee turnover cost in replacing them once they leave. Several companies are becoming more and more aware of the need to ensure that employee satisfaction is a priority to the company. A new terminology used to describe this phenomenon is EX; employee experience.
Our research analyzed data from various surveys and research carried out by trusted research companies such as McKinsey and Deloitte. We got these data points from articles on their websites, or via articles in trusted sources such as Forbes. Other sources included academic articles from established institutions such as Harvard.
RISKS OF DISENGAGED EMPLOYEES
Research shows that on average, at least 17.2% of employees in a company are disengaged. When a company does not keep its talented employees, they risk eroding customer satisfaction and increasing the cost of operations. When considering a specific industry such as a care-center, employee attrition can damage the customer experience significantly. Each new hire in this field may cost between $10,000 and $20,000 in training, direct recruiting costs, and lost productivity during ramp up.
Some companies have a higher engagement level with their employees. For this reason, less than 75% defect, and less than 26% place in a compensation claim related to safety on the job. When comparing the companies that have the highest employee engagement levels versus those that have the lowest, it is revealed that there is 3.9 times earning per share growth rate.
One of the major impacts of disengaged employees is the resultant cost when they leave their place of employment. Older employees, those aged above 55 years old, have a median tenure of 10.1 years, while those aged between 25 to 34 years, have a median tenure of 2.8 years. As of 2016, 44% of millennials expected to shift from their current employer by 2018.
According to Deloitte, the employee turnover cost incurred can amount to tens of thousands of dollars. This can be 1.5 to 2X their annual salary.
The cost incurred for an entry-level may range between 30% and 50%, mid-level may be approximately 150%, and highly skilled-level may be about 400% of their annual salary. In the US, the estimate of the total cost of employee turnover per year is $160 billion.
Harvard Business Review concludes that 80% of employee turnover is caused by poor judgment in the recruitment process. This failure is clear because, within 18 months of being hired, 36% of new employees and 40% of senior managers hired externally fail. However, not all industries get affected in the same magnitude. Here is a sample of some industries and their levels of annual turnover:
- 30% are bank tellers
- 30-45% call center employees
- 100% fast food/QSR outlets employees
- 60-300% hotels staff
- 100% supermarkets employees
- 59% retail employees generally
RETENTION and JOB SATISFACTION
Employee satisfaction plays a big role in retention. A survey shows that 61% of current employees expect to be working at their current job in a year's time while 19% are highly likely to leave within this time frame. 60% of those likely to stay are satisfied with their current job and company, while 62% of those who are most likely to leave are dissatisfied. To maintain great EX, it is critical to keep employees engaged. Jobs are constantly threatened by technology. With the current technological advances, about 45% of the current jobs can be automated, with 60% of jobs are moving toward automation of 30% of their processes. For this reason, employees need to be constantly reassured.
A work environment that is flexible is beneficial to the company as it saves money, reduces stress, increases job satisfaction, reduces negativity in the team. 40% of women tend to leave a job if it is not family-friendly or flexible. Job satisfaction varies across industries. Some of these include:
- Banking, security, and financial services had the highest at 52%
- Travel, transport, and logistics at 44%
- Non-healthcare insurance at 35%
- Telecommunications and technology are the least satisfied at 25%.
A new trend that is emerging is the tendency of associating job satisfaction with a broader purpose whereby the meaning of daily activities is derived from something greater than just a paycheck. However, one obvious hurdle is the ineffective communication from leaders to their employees. Only 38% of leaders say that their employees understand their purpose, commitment, and core values. Research has shown that 70% of employees are not involved, lack enthusiasm, and are uncommitted to their work. 9 out of 10 American employees are not consistently productive in their workplace.
Millennials comprise 30% of the population. However, by 2025, they will represent 75% of the global workforce. It will be paramount to ensure that one meets their needs and expectations. The new term coined for employee retention is EX which stands for employee experience. Paying attention to employee needs is paramount to the success of the company.