The cost of unhappy workers

Worker attrition and disengagement cost median S&P 500 companies about $282 million annually, senior partner Aaron De Smet and colleagues note. Companies that prioritize six factors addressing employee engagement, such as providing adequate compensation and workplace flexibility, could capture $90 million in value.

Organizations can capture nearly two-thirds of the $90 million value at stake from disengagement by prioritizing six key employee factors.

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A hollow pie chart shows 6 main drivers of employee disengagement and their relative contribution to disengagement costs, as a percentage share of the total. The disengagement factors, which could save an estimated $56 million annually, are: inadequate total compensation, 12%; lack of meaningful work, 12%; lack of workplace flexibility, 11%; lack of career development and advancement, 10%; unreliable and unsupportive people at work, 9%; unsafe work environment, 9%.

Note: Scenario assumes 10% attrition and 56% disengagement annually. Estimate based on median S&P 500 size (19,900 employees) and salary ($71,936). Figures do not sum to 100%, because of rounding.

Footnote: Disengagement costs are calculated as the loss of perceived productivity resulting from the proportion of workers reporting low and moderate levels of satisfaction. The relative contribution of the factors to disengagement costs are based on ratings from currently employed workers who report planning to stay at their jobs (n = 9,305).

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To read the article, see “Some employees are destroying value. Others are building it. Do you know the difference?,” September 11, 2023.