A drop in engagement makes sense if you consider many of the initiatives organizations have taken to reduce costs during this economic crisis. Many of the organizations that I work with have laid-off employees, stopped 401k matches, cut pay, implemented forced time-off without pay, reduced benefits, and cut spending on employee-focused programs such as training and development, wellness, and social initiatives.
Here are some questions to ask to get a sense of how important employee engagement is.
- Are your top performers engaged? How much – 100%? 75%? 50%? If someone is less than 100% engaged, what is the cost and impact on productivity?
- What is the cost of reduced engagement to your clients? Is there an impact? Is it causing innovative companies like Apple to take market share as their employees remain engaged, their stock price strong, their product line cutting edge?
- What is the cost of reduced engagement to your product quality? Are deliveries getting out on time? Are people challenging the process to make internal improvements or are they satisfied with the status quo?
Lack of engagement has a real impact to productivity, client service, and quality. BUT, I think a much more costly impact is what I call ATTRITION OF YOUR TOP TALENT. The worst part about attribition of your top talent is that it may be a cost that is beyond calculation. Lose your best people and you lose knowledge that you may never be able to replace. How do you calculate that loss?
I think the risk of attrition of your top talent will begin to skyrocket starting in Q1 2010, as the economy begins to pick up steam. Your underperforming employees aren’t at risk because no one wants to hire them anyway. Your average performing employees probably aren’t going anywhere with 10+% unemployment rate. But, as the economy improves, your top talent will be the first to see the best offers. And, the way that they have been treated over the past 12 months will define whether they stay or go.