Financial Data
Updated 26 Feb 2020


Know the true cost of employee disengagement on your business

Gallup estimates that actively disengaged employees cost the USA between USD450 billion to USD550 billion each year in lost productivity. In South Africa, disengagement levels are even higher than in the US. 


Nadine Todd, 05 February 2017  Share  0 comments  Print


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According to Gallup polls, 46% of employees have no sense of belonging, and no confidence in the businesses they work for and quality of leadership they’re expected to follow. In other words, they are highly disengaged employees.

Here are three reasons for employee disengagement, and what you can do to avoid it in your company:

1. Debt on the mind

In South Africa, 74% of the average employee’s take home pay is spent servicing debt. “This level of indebtedness means that the average South African gets poorer the longer and harder they work,” says Gary Kayle, co-founder of The Money School, an independent, scalable financial education solutions provider for businesses.

Kayle and his business partner, Hayley Parry, are working hard to equip people with the skills and confidence they need to eradicate debt and achieve their financial and lifestyle goals.

But, what does this mean for you as an employer or HR manager? “Money stress affects all aspects of our lives, including our work lives,” explains Parry.

Related: De-stressing: Get out of debt as a matter of urgency

“The larger an employee’s debt, the higher their stress. This has a knock-on effect on their health, productivity and even attendance at work. It is also a major contributor to ‘presenteeism’, where an employee is physically at work, but completely disengaged in their tasks.”

Parry adds that the average South African employee spends three hours or more per week on financial problems and 45% of each day worrying about money. “It’s difficult to concentrate on work responsibilities when you’re always stressed about money,” adds Kayle.

The result is that employees start to resent their employers, believing they are under paid, when in fact their problems stem from debt and the mismanagement of their primary wealth building tool – their salaries.

The fix: Support employees by educating them on financial wellness and the options open to them to reduce debt and build wealth. Do not assume this is only a blue-collar worker issue. According to Parry and Kayle, white collar workers are as indebted as their blue-collar counterparts, sometimes even more so.

2. (Un)inspired leadership

Uninspired -leadership

Brand Pretorius, the man who played a pivotal role in bringing McCarthy back from the brink of bankruptcy to highly profitable, believes that an organisation’s success rises and falls with its leadership.

He saw this phenomenon clearly when comparing the success of various McCarthy dealerships. Dealerships that were run by engaged dealer principals who encouraged their employees, paid attention to their personal lives and celebrated wins with them ran successful dealerships, even if they weren’t positioned in the best areas.

However, dealer principals who tended to be negative, who complained a lot and who blamed their employees for poor sales and income streams tended to run less successful and certainly less profitable dealerships.

The fix: Pretorius’ advice is to understand the difference between leadership and management, and know that every organisation needs both.

“Teams are generally over managed and under led,” he says. “Both functions are critically important to the success of an organisation; you do need both. Management is for effective execution, leadership is for vision. Leaders should be obsessed with creating a better tomorrow for the good of all. They focus on people and they unite everyone to a common cause and vision. Managers on the other hand look at today. They focus on processes, and on ensuring that everyone does what they’re meant to.”

Ultimately, your employees need a vision to believe in, and a roadmap to follow.

Related: 6 Leadership styles you need to be the ultimate leader

3. Communication isn’t where it needs to be

According to Melody Tomlinson, co-creator and licensor of The Performance Booster Programme, which is based on the principles that people need to be given the tools to inspire and motivate themselves, communication is a real concern in the work place.

“We’ve found that many employees perceive that their managers don’t listen to them,” she says. “We’ve found that 90% of workplace problems stem from poor communication, rather than an actual issue. How things are addressed, and what people hear and feel during a situation cause more problems than the issue being addressed in the first place.”

According to Tomlinson, managers who learn to communicate well become highly effective leaders with high performing teams. “Their teams know what’s expected of them and feel that their needs are addressed, which improves office relations, focus and most importantly engagement and productivity.”

The fix: Pay attention to how communications in the organisation are worded, and if the different ways that people communicate are taken into account. ‘Text’ language and emails in particular are easy to misconstrue. Ensure your management team is sensitive to the emotional landscape of their teams, and address any potential miscommunication sooner rather than later.


TAKE NOTE

A great exercise to help employees determine their own values, identify their goals and link those goals to the business is to ask each team member to list 60 successes in life. Step two is to link those successes to people that have helped them become successful. There will be varying degrees of involvement in each answer, but nothing is achieved in isolation.

Where the magic happens: It’s impossible for the company to not feature in this success list. For some, there will be a dominant impact, for others it might be smaller. Either way, there will be a clear indication of the role the organisation plays in achieving goals and enjoying successes.

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About the author


Nadine Todd


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