Value Destruction by Employees

A new research suggests that employee disengagement and attrition could cost companies making the S&P 500 list anything between $228 to $355 million a year in productivity losses, which could total up to $1 billion in lost value per company over five years. And the fault may actually lie with the company and not the employee! 

A Mckinsey report suggests that more than half the employees report being relatively under productive at work. In fact, in the post-pandemic era, companies are also finding it tough to gauge employee effectiveness given the hybrid work models, especially at a time when labor costs have grown and productivity levels have declined. 

The six types of employees in a company

Per the report, Mckinsey has identified six employee groups or types across a spectrum comprising satisfaction, engagement, performance and well-being. The workers range from highly dissatisfied and actively disengaged (above 10%) to a group of thriving stars (4%) of the average organization. 

While the former are those who actively destroy value within an enterprise, the latter set are the ones that build value through positive engagement and commitment to others. What comprises the middle of this spectrum are workers who experience varying levels of engagement and satisfaction that results in their performance varying from good to not-so-good. 

What leaders must do to grasp this challenge

The report goes on to say that corporate leaders need to first grasp that their workforce are not monolithic when it comes to employee experience. This means their tactics should comprise a more segmented approach where leaders can apply differentiated strategies to groups based on their position on the six groups mentioned above. 

The aim is to use these interventions to boost the levels of satisfaction and commitment, performance, and wellbeing, all of which ultimately results in higher engagement levels and better staff retention. Leaders should appreciate that respondents’ own performance measure could be a useful and revealing way to measure performance. 

However, leaders should seek to provide the best possible experience regardless of the working model in the enterprise. They should offer structure and support around activities best done in person or remotely. This includes helping managers measure performance based on outputs and objectives completed instead of input factors such as time spent or location. 

The best way forward for enterprises

The key challenge is for companies to move as many workers as possible away from the dissatisfied group and towards greater engagement and commitment. This would ensure that workers get the opportunity to develop skills, reduce dissatisfaction and attrition rates and bring in clear financial and organizational benefits over the long term. 

The research came up with six distinct groups that every company came up with based on their levels of engagement. These are as follows: 

• The quitters could be around 10% of the staff in a company who are not necessarily the lowest performers in an organization. They may be some of the least satisfied and committed and those feelings can affect their performance and cause them to leave.
• The disruptors could be around 11% of the workforce which is actively disengaged and potentially creates a negative influence. This isn’t necessarily due to their behavior but how the organization treats them and the perception of their peers. 
• The mildly disengaged comprise around 32% usually report below-average commitment and performance levels. They’re neither satisfied nor actively disengaged. But they disrupt by only putting time and effort that is minimum without being proactive. 
• The double dippers account for about 5% of the workforce and are dispersed across the satisfaction spectrum. They could be moonlighters who are using the remote working to take up more than one job at a time. 
• The reliable and committed stand at the top with 38% in an organization and are reliable performers who execute BAU activities. They also help their peers by sharing ideas for projects and assisting in upgrading their teams all the time. 
• The thriving stars constitute around 4% of a workforce and are those who bring big value to the company. They achieve high levels of well-being and performance and create a work-life balance of their adaptability and resilience. 

For leaders it’s a matter of experimentation

The report notes that to address high dissatisfaction and lower productivity, leaders can work to keep the thriving stars satisfied and engaged while creating the same conditions for other types of workers. While it may not be possible to alter the behaviors of all disruptors and mildly disengaged, leaders can identify such employees who are more likely to respond. 

Thoughtful interventions such as career development opportunities, flexibility, and a greater sense of purpose. This strategy can reduce costs from lost productivity and build a more resilient and engaged workforce, the report concludes.