cost of lost productivity - march 2012
DESCRIPTION
This presentation addresses a crisis of engagement among the American workforce, suggests some reasons why this crisis exists and provides a tool to help you calculate the possible cost of this loss of productivity in your organization.TRANSCRIPT
The Financial Impact of aLoss of Employee Engagement
03.19.12
Findings from a Recent Gallup Poll
Level of Engagement
4th Qtr2010
1st Qtr2011
2nd Qtr2011
3rd Qtr2011
% Engaged 28 30 30 29
% Not Engaged 53 52 51 52
% ActivelyDisengaged 19 18 19 19
71%
Source: Gallup Consulting, Majority of American Workers Not Engaged in their Jobs, October 28, 2011
Potential Sources of Employee Lack of Engagement
Lack of effective leadership
Unhealthy organizational culture• Burearacracy• Silo mentality• Micro-management• Blame• Lack of accountability
Lack of an inspiring vision
Lack of shared values
Lack of inspiring work
Lack of effective communication
Why It Really Matters!
Beyond the fact that engaged employees are:
• More productive• Contribute more to profitability• More focused on safety• Absent less often
Engaged organizations have 3.9 times the earning per share growth (EPS) when compared to organizations with lower levels of employee engagement.
Source: Gallup Consulting, Employee Engagement, A Leading Indicator of Financial PerformanceMarch 19, 2012
The Evolution of Employee Engagement:
Quadrant 1Engaged but
Not Yet Competent
Quadrant 2Fully Engaged andFully Competent
Quadrant 4Disengaged and
No Longer Competent
Quadrant 3Disengaged and
Still Somewhat Competent
Recruit, Select, Hire and Train. Highly productive and effective.
Recruits others to join in.Requires a significant amount of
manager time.Quit or Fire??
This too requiresmanager time
Time for a new hire
Adapted from a model created by Judy Suiter of Competitive Edge, Inc.
Calculating the Cost to Your Organization:
Total Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
x Percentage of Employees in Quad. 3 . . . . . . . . . . . . . . . . . x 71%
Estimated Number of Employees in Quad. 3 . . . . . . . . . . . . . . .106.5
x Average Monthly Compensation of Emp. In Quad.3. . . . . . $2,500
Estimated Average Monthly Payroll for Emp. In Quad. 3 . . $266,250
X Percentage of Lost Effectiveness (100% - 70%) . . . . . . . . . . . 30%
Estimated Monthly Cost of the Individuals in Quad. 3 . . . . . $79,875
Estimated Annual Cost of the lost productivity of the Individuals in Quad. 3 . . . . . . . . . . . . . . . . . . . . . .$958,500
For more information about our programs to enhance engagement in your organization, please contact us at:
Level Up Leadership, Inc.Office: 919-510-0426
Joy’s Mobile: [email protected]