Are Disengaged Employees Destroying Your Business?

Bad management causes disengaged employees—a deadly combination for your business.
June 24, 2013

If your employees aren’t happy or don’t love their jobs, you might be paying for it—big time.

A new Gallup study looks at the effects bad or ineffective managers have on a company’s bottom line, and the results aren’t pretty. It found that 70 percent of Americans are either “actively disengaged” from their jobs or simply “disengaged”—meaning “not inspired by their work or their managers.”

Disengagement, it found, leads to a host of other costly problems: More workplace accidents, higher health care costs and more quality defects. For example, it found that the bottom 25 percent of teams in terms of engagement incur 50 percent more accidents at the workplace than the top 25 percent. On the flip side, the most engaged employees come up with the most ideas, create the most new customers and have the most entrepreneurial drive.

“Managers from hell are creating active disengagement costing the U.S. an estimated $450 billion to $550 billion annually,” Gallup CEO Jim Clifton wrote. “If your company reflects the average in the U.S., just imagine what poor management and disengagement are costing your bottom line.”

The research was based on more than 25 million responses to Gallup’s employee engagement surveys (a service that Gallup sells to companies).

While the study looked at companies of all sizes, the effects of poor management on a small business can be especially amplified. Employees have little buffer—few places to turn—if they don’t get along with their boss. There’s nobody to report if your manager runs the business.

Other studies have found that bad management is one of the leading causes of small-business failure.

The problem of bad management seems to be widespread in the U.S. right now. A new “Employee Satisfaction Report Card by City” from Glassdoor.com ranks the 50 largest U.S. cities by employee satisfaction based on employee reviews left on the site. While it finds that employee satisfaction is highest in West Coast cities such as San Jose, Calif., San Francisco and Seattle, the average rating in these tops cities is still just “OK.” 

Photo: iStockphoto