Cost of Disengagement

The current economic crisis has negatively impacted just about every company across all industries and sectors. The uncertainty and stress that has resulted for many employees is causing further damage to our economy through lost productivity, decline in quality of customer and co-worker relationships, increased incidence of accidents, and decreases in product and service quality.

A recent study conducted by Quantum Workplace (Hirshfield, Branham, & Harris, 2008) indicates that after 5 consecutive years of modest increases in the engagement of American employees, this crisis has ushered in a steep downturn, and may have caused the economy to fall into a 'psychological' recession as well as an economic one. These researchers report that, prior to fall of 2008, 84% of the American workforce reported being either highly or moderately engaged. Since October of 2008, however, about 2 out of every 3 companies have significantly lower employee engagement than they did in 2007.  Probably the most compelling evidence of the importance of employee engagement comes from a study conducted by Towers Perrin (2007), in which the researchers found that:

• Companies with the highest level of employee engagement increased (year-over-year) operating income by 19%, earnings per share by 28%, and operating margin by 3.7%
• Companies with the lowest level of employee engagement decreased (year-over-year) operating income by 33%, earnings per share by 11%, and operating margin by 2%

The calculator below can be used to determine part of the financial impact this psychological recession has had on your company.

Instructions:

1. In the Light Grey Boxes only, enter your information using only numbers (no commas, decimal points or other characters).
2. Click "Calculate" to compute the Cost of Disengagement.