Lisa Earle McLeod* says organisations with the lowest employee turnover are often the least efficient and productive.
Imagine you have a low engagement employee. We all know who they are.
They’re the people who show up for work with their body, but they leave their hearts and minds at home.
I refer to them as the quit and stays: They quit caring, but they stay in their jobs.
The leadership question is, are you better off with them or without them?
Would you rather have them quit? Or is it easier to just let them stay?
Replacing an employee is costly, searching for, and training a replacement will cost you a minimum of six-to-nine months of salary.
If an employee making $100,000 a year quits, it will cost you between $50,000-and-75,000 to replace them.
Numbers like these cause leaders to hold onto low performing disengaged employees.
The assumption is, it’s too time-consuming and expensive to replace them.
In her recent LinkedIn piece, Employee Engagement vs. Employee Retention: Which is More Important?McLeod & More’s Vice President of Project Management, Elizabeth Lotardo identifies the impact lower performers have on the organisation.
She writes: “While most HR initiatives address these two issues (retention and engagement) as one; they are actually separate, and can be impacted independently.”
Elizabeth’s research revealed: “A disengaged employee costs an organisation an additional $3,400 for every $10,000 in annual salary.
“If a disengaged employee is making $100,000 a year in salary, their actual cost to the organisation $134,000.”
Those are the hard costs; the opportunity costs are even greater.
A disengaged team member has a chilling effect on everything and everyone.
In key roles like project development and client relationships, they will cost innovation and development growth.
Anyone who has worked for a disengaged leader knows how totally dispiriting it can be.
Elizabeth points out: “Stagnant organisations have high retention, yet low engagement.
“Employees stay because, as they’re quick to tell you, ‘the benefits are too good to leave’.”
She cites a State Government as an example where “only 29 per cent of employees are fully engaged in their jobs, yet the State Government turnover rates average a mere one per cent”.
A low turnover, high disengagement culture is a recipe for mediocrity.
Those 29 per cent of fully engaged State workers undoubtedly feel the pain of their disengaged colleagues, as do their constituents.
Elizabeth’s research confirms that organisations with high employee engagement outperform those with low engagement by 202 per cent.
High engagement organisations have 70 per cent fewer safety incidents, 41 per cent lower absenteeism, and 40 per cent fewer quality defects.
If people are quitting left and right, you have a retention problem.
If your good people are the ones quitting, you have something worse; you have an engagement problem.
High performers won’t stay in a low engagement culture.
If they do, they will often cease to be high performers. They’ll become the quit and stays.
Elizabeth suggests: “The critical question leaders must ask of themselves and their organisation is whether their workforce is highly engaged, or just too comfortable to leave?”
Firing low engagement employees doesn’t work long-term.
If you don’t change the culture, you’ll just attract more of the same.
Improving engagement requires an intentional long-term approach.
Leaders can help people forge a better emotional connection to their work by being clear about the impact their work has on clients and constituents and fostering a team environment.
The quit and stays may seem benign, but don’t fool yourself. They’re costing you plenty.
*Lisa Earle McLeod is best known for creating the business concept Noble Purpose. She is the author of Selling with Noble Purpose and Leading with Noble Purpose and can be contacted at mcleodandmore.com.
This article first appeared on Lisa’s blogsite.
