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August 26, 2016 by
aliereadvisors
Employee engagement impacts all aspects of business. However, you may be surprised to know that a large number of business owners and managers dismiss its importance as a tool that affects and influences the bottom line of a business.

The reality is that employee engagement does have an effect and research has proven that its impact is much more than expected.

Did you know that 20 million employees of the total American workforce are actively disengaged?

Multiple research studies on companies across the world has proved that employee engagement has a measurable impact on:

  • Profitability
  • Productivity
  • Customer Service
  • Turnover
  • Safety Incidents
  • Absenteeism
  • Shrinkage
  • Quality

Companies that have high levels of employee engagement showed an increase of 19% in operating profit whereas companies with low levels of employee engagement declined 33%.

Bad employee engagement also leads to 62% more accidents, 51% more inventory shrinkage and 31 – 51% more employee turnover. Disengagement not just affects large companies but impacts small and medium businesses too.

There is no denying the fact that disengagement costs money.

Cost of Bad Employee Engagement on Business’ Bottom Line

Absenteeism

There is a lot of difference between a planned vacation and unplanned absenteeism. Planned holidays are valuable for both employees and employers. As these vacations are planned in advance, there is minimal effect on work and business.

Unplanned absences from work are costly as they directly impact productivity.

When employees are absent from work, it can affect the overall morale at the workplace. Apart from this it can lead to an increase in workload of other employees, decreased quality of work and additional training costs.

Customers

Bad employee engagement is contagious. It not just affects employees at the workplace but customers too, and this can have disastrous consequences on the bottom line of your business.

Excellent customer service helps build brand loyalty and drives repeat business. When disengaged employees interact with customers they are not providing the best that the company has to offer and this can have a negative impact on the business.

Safety

Employee disengagement can have a considerable impact on the safety of employees. In addition to cost of property damage and breakage, it can cost a significant amount of money to companies if any employee is injured.

This not just affects productivity but also adds a considerable amount of “stress” to the rest of the team at the workplace. As disengaged employees care less about the job, they do not follow the necessary safety precautions at work resulting in accidents.

Morale

Disengaged employees can cause “dissatisfaction and disruption” within the company and this can affect the morale of all in the team. Just a few disengaged members can have an overall impact on the team and this can seriously affect productivity and profitability.

With so many aspects of business getting affected directly or indirectly by bad employee engagement, it makes sense to focus your time and resources on improving them. PEO provides simple but effective tools that you can use to measure and improve employee engagement.

When you start utilizing these tools, you can also see your business bottom line improve as a result.

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