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The Hidden Costs of Unhappy Employees

Shhhh, do you hear that?  That is the sound of unhappy, disengaged employees – it can be silent but deadly or loud and disruptive. Some employees let you know why they are dissatisfied and some just quit without telling you why they left.   Employees who remain at your organization but are unhappy are often disengaged and disruptive.  This can translate into loss of production, theft, safety issues, poor customer interaction, absenteeism, loss of profits and negative morale. Even more detrimental can be the loss of knowledge that employees take with them and the possible damage to a company’s reputation when unhappy employees are vocal about their dissatisfaction with their past employer.   A recent Gallup poll said that 70 % of US workers are not engaged at work costing employers up to $450 billion per year.  Unhappy employees will affect your organization monetarily, but they can also cost companies their reputation and competitive edge. The expense of hiring and training replacements for these employees will add to the burden for employers.  Gallup estimates that turnover can cost companies 100-300% of the base salary of the employee being replaced.    Administration costs, possible unemployment, severance, and/or legal fees can prove to be very costly and time consuming.

So what can companies do to minimize these issues?  The following 6 suggestions can improve the morale and engagement of your employees:

Smart Hiring:  Start with a thorough and compliant hiring process.  Many employees are unhappy simply because they are not a good fit for the organization.  Ensure that interviewers have standard interview questions that relate to each position and each interview includes a discussion of the company’s culture.  This way both the company and the candidate can make informed decisions about whether the position is appropriate.

Thorough On-boarding:  Ensure that you have an on-boarding process that includes not only the compliant paperwork needed, but also includes discussions about career growth and specific vehicles for employees to make suggestions or express concerns.  A Mentor Program can guide employees through company politics, provide coaching and support them in their role within the organization.  Increased feedback and support translate into more engaged, productive employees.

Employee Surveys:   Institute employee surveys to ask what employee feel are the positive and negative aspects of the company.  If you don’t know what the problems are you can’t fix them. You may not be able to make all the changes employees desire, but sometimes employees just want to be heard.  Make sure you follow up with employees to let them know what changes will be made and why others cannot.

Training:  When employees do not know how to complete their job responsibilities they can become frustrated and disengaged.  Training employees properly will increase productivity and show them you are investing in their success.  Management training is even more important.  Often employees are promoted to a management or supervisory role without giving them training on how to be a good manager. If the management team is not trained in how to give feedback, training, coaching and how to motivate their staff it can significantly impact productivity and employee’s satisfaction with their role within the organization.   Additionally, managers and supervisors should be trained on how to consistently apply company policies and procedures and they should know basic workplace laws.  Without this training, managers and supervisors can inadvertently expose the company to liability and/or charges and lawsuits.

Employee Recognition Programs: Getting recognition can be a major contributor to an employee’s happiness and engagement at work.  Setting up an employee recognition program does not need to be expensive or time consuming.  A simple program that is communicated to employees will go a long way in making employees feel they are appreciated and doing a great job.

Career Transition Services: Don’t ignore the employees that are leaving your organization.  Consider exit interviews to find out why they are leaving, and try to correct those issues that you can.  Career transition services for terminated employees can significantly decrease the time it takes individuals to find new employment, cutting down on unemployment costs as well as minimizing negative comments made about the company.

The bottom line is that happy employees are more engaged, more productive and stay longer than unhappy, disengaged employees.  Companies simply cannot ignore the importance of focusing on engaging their employees.

Portnoy, Messinger, Pearl & Associates, Inc. works with companies of all sizes throughout the United States to assist them in reducing turnover and increasing morale.

This article is intended for general information only and should not be construed as legal advice.


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