26th July 2010
What is the cost of not engaging your workforce? Derek Luckhurst thinks the current cost cutting environment risks creating even more disengaged workers, with consequences leaders might not anticipate
Every person reading this will have already realised that these are challenging times for UK Plc – despite economic growth of around 1.1%, the overriding theme is cuts, with the public sector particularly vulnerable to the dreaded “diagonal slice” method of reducing costs. Even before the extent of the cuts in the public sector were made clear, it was not uncommon to hear politicians and leaders in the public sector stating that “redundancies are inevitable”, but is that necessarily the case? If senior managers are saying this, is it a carefully thought-through analysis of the situation or is it a knee-jerk self-fulfilling prophecy? In other words, is it a “no brainer” – a phrase that is often used to explain such decisions? The very use of the phrase, however, strongly suggests a knee-jerk reaction, the consequences of which are serious but rarely identified.
UK workers are not fools. They know times are tough and they know that redundancies will happen. What they want to know is whether each and every redundancy is part of a considered process that concludes, as a last resort, that only these redundancies will meet the defined business objective. If the workforce believe the opposite, that redundancies are the objective in themselves, the often unnoticed cynicism that arises as a result, will have serious repercussions.
A recent survey by Gallup in 2008 suggested that disengaged workers cost the UK economy between £59.4 billion and £64.7 billion per annum. Sickness and absenteeism costs, according to some sources, anything up to £13.4 billion. If organisations need to make savings, surely addressing this disengagement is where they should start. The problem is, unlike headcount, disengagement is not specifically recorded on the balance sheet – but it will be there somewhere.
The MacLeod Report recently stated that Gallup, in 2006, examined 23,910 business units and compared top quartile and bottom quartile financial performance with engagement scores. They found that:
• Those with engagement scores in the bottom quartile averaged 31 – 51 per cent more employee turnover, 51 per cent more inventory shrinkage and 62 per cent more accidents.
• Those with engagement scores in the top quartile averaged 12 per cent higher customer advocacy, 18 per cent higher productivity and 12 per cent higher profitability.
A second Gallup study of the same year of earnings per share (EPS) growth of 89 organisations found that the EPS growth rate of organisations with engagement scores in the top quartile was 2.6 times that of organisations with below-average engagement scores.
Cynicism, baggage, “chips on the shoulder” – these are the calling cards of the disengaged worker. My colleague, Jasmine Gartner recently shared an experience of coming face to face with people who typify this mindset and I realised that this was exemplified a wider problem in the UK workplace:
“At a recent training session, one representative had previously come to the attention of management for her aggressive tone of voice and for attacking without asking questions first. Her questions would often assume that change in the organisation was intended as direct assault on staff, and her questions would reflect this - "Are you going to bother to tell us when you decide who is good enough to continue working for you?" - and her voice would be full of irritation and anger. The typical management response, of course, was defensiveness. At the beginning of the training session, she still was quite aggressive, asking me questions along the lines of "Who are you? What can you tell me that I don't already know?
"As the course went on, however, a distinct change occurred, particularly during the second half of the session, when we covered the skills and behaviours necessary to achieve the forum’s goals. We looked at how body language and metalanguage can destroy dialogue, and we came up with a set of questions that would enable real understanding of what was happening at her organisation. Armed now with a good set of questions and an understanding of how to communicate it well, she started to use that same energy she had previously applied to attacking in a more positive and productive way. At the end of this session, when the manager came in, she led the way in the questioning, except now, her tone of voice had changed, and I could see her working to rephrase questions in a non-offensive way, and trying to ask questions until she got an answer without making the manager feel that she absolutely hated him. His response was collaborative.”
In another organisation, there were two representatives who were known by others for slowing things down, asking questions just to ask questions, and being aggressive. Only one turned up to the training session, and I gave him a leadership role. All of a sudden, he was dealing with some of the same behaviours that he engaged in himself. By the end of the session, he was open and friendly and excited about the process. Unfortunately, a few months down the line, he was back to his old behaviours, in part because he was influenced by the other representative.
Based on our own experience, the IPA estimates that at least 20% of the UK workforce are similar in attitude and behaviour to those representatives described here. Some argue that the figure is much higher. These behaviours and mindsets typical of the disengaged worker contribute significantly to the “waste” that is so often described, particularly in the public sector. And yet, the solution to eliminating that “waste” appears to be a “no brainer” arbitrary cull of staff which leads only to more cynicism and baggage amongst those who are left and a perpetuation of these behaviours as people carry them into new workplaces. It is the most vicious of circles.
The real problem is not so much that the disengaged, cynical 20% are the last people to be invited on a works’ night out – it is that they cost their organisation money. Whether it is by sickness, absenteeism, their role in establishing a grievance culture or by just moaning enough to create a negative workplace, people who have lapsed into this type of behaviour waste time and energy. Sadly, they are often placed in the “too difficult to deal with pile” and efforts to engage them are considered pointless exercises.
As Jasmine also stated, “Although we can’t perform miracles, we can change behaviours and develop skills, given the time and commitment from management and reps.” Although it might appear simplistic to say that disengagement can be addressed simply by making sure all staff know that management have thought the difficult decisions through carefully and methodically, it is a good starting point. Making sure that staff know that other options were considered before redundancies were announced is surely something that would, at the very least, create an understanding that would prevent further cynicism developing. At present, the vast majority of organisational communication perpetuates the feeling amongst staff that the “no brainer” is the method of making these difficult and unpopular decisions. The big question is, how do we break this cycle? Training is, of course, one method but that still leaves an organisation in a position where it has to sustain the progress.
On 7 October, an expanded meeting of the IPA’s Best Practice Network will be held at the new offices of United Welsh in Caerphilly. The Network consists of representatives from many organisations who meet three times a year to ensure areas of good practice are both shared and developed to meet new challenges in the workplace. This meeting in October will concentrate on addressing the issue of engaging the disengaged, breaking the cycle described and eliminating the waste that disengagement creates.
For this meeting, managers and HR professionals with a genuine interest in exploring how employee engagement can and has contributed to “bottom-line” savings will be invited. If you are reading this article, the chances are that you are one of those people. Although places will be limited, if you are interested in finding out more about the meeting, please contact me (
Derek.Luckhurst@ipa-involve.com). It’s surely the closest you’ll ever get to a decision that is a “no brainer”?
Derek Luckhurst is IPA training and development director
