Mind of the Manager

What works and what doesn't in the workplace

Most American Workers Are Disengaged. Why?

An epidemic of employee disengagement costs the U.S. over $450 billion a year.

I finally got around to spending quality time with Gallup’s State of the American Workplace survey, published earlier this year. As always, it was excellent but disturbing reading, a vast amount of data from more than 350,000 respondents over a three-year period, shedding fascinating high-level light on how Americans feel about their jobs.

There’s plenty here, so we’ll dive right in.

The big picture - Entirely consistent with other (equally downbeat) employee engagement surveys. Gallup’s data shows 30% of employees Engaged, 52% Disengaged, 18% Actively Disengaged. “These latest findings indicate that 70% of American workers are ‘not engaged’ or ‘actively disengaged’ and are emotionally disconnected from their workplaces and less likely to be productive,” states the report. “Gallup estimates that these actively disengaged employees cost the U.S. between $450 billion to $550 billion each year in lost productivity. They are more likely to steal from their companies, negatively influence their coworkers, miss workdays, and drive customers away.”

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More educated, but not more engaged - Though higher education generally leads to higher earnings, it by no means guarantees higher engagement. Consider the data: College graduates in the survey were 28% Engaged, 55% Not Engaged, 17% Actively Disengaged. High school graduates were 32% Engaged, 49% Not Engaged, 19% Actively Disengaged. Reasons weren’t explored in the study, but a hypothesis is that higher education levels bring with them higher expectations—which are often not being met when one is underemployed in a weak job market.

Women are more engaged than men - A surprising finding, in light of well-known “gender equality” issues involving pay and “glass ceilings.” Women were 33% Engaged, 50% Not Engaged, 17% Actively Disengaged. Men were 28% Engaged, 53% Not Engaged, 19% Actively Disengaged. For this survey, 33% versus 28% is a statistically significant difference.

Remote workers are more engaged - Interesting data, in light of the headlines and discussion earlier this year raised by Yahoo's Marissa Mayer around telecommuting. Gallup’s findings: Remote employees were 32% Engaged, 50% percent Not Engaged, 18% Actively Disengaged. On-site employees were 28% Engaged, 51% Not Engaged, 20% Actively Disengaged. Doubtless much more will be studied about this particular issue, but the Gallup survey provides macro-level data for the conversation.

Too few “brand ambassadors” - According to the report, “Only 41% of employees felt that they know what their company stands for and what makes its brand different from its competitors’ brands.” As always, such findings point to the need for more and clearer communication from senior management to all organizational levels.

Engagement by generation - The most engaged generations are those leaving and entering the workforce, says Gallup’s data. “Traditionalists” (defined as those at the oldest end of the spectrum, comprising 4% of the working population) were 41% Engaged, followed by Millennials at 33%. Trailing the pack are Generation X at 28% Engaged and Baby Boomers at 26%. (My own assessment of the bullish level of Traditionalist engagement? “The finish line is in sight!”)

Employee engagement’s overall effect on the bottom line - Gallup’s research notes that work units in the top 25% of their engagement database have considerably higher productivity and profitability ratings, for example, combined with less turnover and absenteeism. “Organizations with an average of 9.3 engaged employees for every actively disengaged employee in 2010-2011 experienced 147% higher earnings per share (EPS) compared with their competition in 2011-2012,” the report states. “In contrast, those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period.”

Put simply, an engaged workforce makes good financial sense, as anyone familiar with the topic knows.

At a micro level, the leading factor influencing employee engagement is widely accepted to be an employee’s relationship with his or her own direct manager.

This sentiment is amplified in the report by Gallup CEO Jim Clifton “Here’s something they’ll probably never teach you in business school: The single biggest decision you make in your job—bigger than all of the rest—is who you name manager. When you name the wrong person manager, nothing fixes that bad decision. Not compensation, not benefits—nothing.”

It’s a strong statement. But I agree.

This article first appeared at Forbes.com.

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Victor Lipman recently retired from the corporate world after 25 years with one of America's largest life insurance companies. He writes about management from a psychological perspective.

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