November 20, 2015

Unhappy Staff

How much does an unhappy employee cost you? As much as £16,000, according to new research by the best practice insight and technology organisation, CEB. The report states that a high level of job dissatisfaction is costing employers £16,000 per employee in turnover costs.

What is the cause of this job dissatisfaction? Seventy per cent of the 12,000 employees featured in the survey cited a lack of opportunity in their current role as the main cause of their dissatisfaction. They feel as if they are ‘stuck in a job rut’ and are unhappy with their future career prospects where they are.

This dissatisfaction is causing people to leave roles as they look for career progression elsewhere. Flat organizational structures are highlighted as a real problem.

The report found that some organisations are doing the best they can to engage and motivate employees by giving them more career opportunities around the business. This can be the spending time in a different office, on a more challenging assignment or special project or just a stint in a different department. CEB says those organisations really reap the benefits in terms of improved morale and lower turnover rates. It claims that improving the career prospects for your workforce can reduce turnover by 33%, leading to savings of £4.9 million a year for an organisation with 10,000 employees.

CEB says that its research also points to a problem with the decline of the traditional, linear career path that enabled hard working employees to climb a clearly defined career ladder, one step at a time. Employees like to progress their careers and they like to know that new possibilities are ahead, within reach. Instead, CEB says employees these days are spending an extra three years in each role than they were in 2010 and when they do move, it’s a sideways step rather than an upwards one.

There are other, more hidden costs of course from having unhappy employees. Low morale is contagious and it doesn’t take long for one disgruntled employee to have a negative effect on the general wellbeing in the workplace. This is particularly the case for those in a management position. It might not be long before that £16,000 turnover cost is multiplied several times over.

Also, there is so much research on how having an engaged and motivated workforce is good for organizational productivity, agility and customer satisfaction. The US research and performance management company Gallup carries out regular research into employee engagement and how it impacts on business success. According to one such study, those organisations with high levels of employee engagement nearly double their chances of success than those with actively disengaged employees. It also found that organisations reporting the highest levels of employee engagement outperformed those reporting the lowest levels of employee engagement in several key areas:

– profitability 22%
– productivity 21%
– customer ratings 10%

Furthermore, they reported 25% less turnover and 37% less absenteeism. It looks like a dissatisfied employee could be costing even more than £16,000 a year.