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The Financial Impact of a        Loss of Employee Engagement03.19.12
Findings from a Recent Gallup Poll        Level of             4th Qtr        1st Qtr         2nd Qtr         3rd Qtr     ...
Potential Sources of Employee Lack of Engagement• Lack of effective leadership• Unhealthy organizational culture   •   Bur...
Why It Really Matters!  Beyond the fact that engaged employees are:     •   More productive     •   Contribute more to pro...
The Evolution of Employee Engagement:Time for a new  hire            Quadrant 1                                Quadrant 2 ...
Calculating the Cost to Your Organization: Total Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . ....
For more information about our programs toenhance engagement in your organization, pleasecontact us at:          Level Up ...
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Cost of Lost Productivity - March 2012

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This presentation addresses a crisis of engagement among the American workforce, suggests some reasons why this crisis exists and provides a tool to help you calculate the possible cost of this loss of productivity in your organization.

Published in: Business, Technology
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Cost of Lost Productivity - March 2012

  1. 1. The Financial Impact of a Loss of Employee Engagement03.19.12
  2. 2. Findings from a Recent Gallup Poll Level of 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr Engagement 2010 2011 2011 2011 % Engaged 28 30 30 29 % Not Engaged 53 52 51 52 71% % Actively 19 18 19 19 Disengaged Source: Gallup Consulting, Majority of American Workers Not Engaged in their Jobs, October 28, 2011
  3. 3. Potential Sources of Employee Lack of Engagement• Lack of effective leadership• Unhealthy organizational culture • Burearacracy • Silo mentality • Micro-management • Blame • Lack of accountability• Lack of an inspiring vision• Lack of shared values• Lack of inspiring work• Lack of effective communication
  4. 4. Why It Really Matters! Beyond the fact that engaged employees are: • More productive • Contribute more to profitability • More focused on safety • Absent less often Engaged organizations have 3.9 times the earning per share growth (EPS) when compared to organizations with lower levels of employee engagement. Source: Gallup Consulting, Employee Engagement, A Leading Indicator of Financial Performance March 19, 2012
  5. 5. The Evolution of Employee Engagement:Time for a new hire Quadrant 1 Quadrant 2 Engaged but Fully Engaged and Not Yet Competent Fully Competent Recruit, Select, Hire and Train. Highly productive and effective. Quadrant 4 Quadrant 3 Disengaged and Disengaged and No Longer Competent Still Somewhat Competent This too requires Recruits others to join in. manager time Requires a significant amount of manager time. Quit or Fire?? Adapted from a model created by Judy Suiter of Competitive Edge, Inc.
  6. 6. Calculating the Cost to Your Organization: Total Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 x Percentage of Employees in Quad. 3 . . . . . . . . . . . . . . . . . x 71% Estimated Number of Employees in Quad. 3 . . . . . . . . . . . . . . .106.5 x Average Monthly Compensation of Emp. In Quad.3. . . . . . $2,500 Estimated Average Monthly Payroll for Emp. In Quad. 3 . . $266,250 X Percentage of Lost Effectiveness (100% - 70%) . . . . . . . . . . . 30% Estimated Monthly Cost of the Individuals in Quad. 3 . . . . . $79,875 Estimated Annual Cost of the lost productivity of the Individuals in Quad. 3 . . . . . . . . . . . . . . . . . . . . . .$958,500
  7. 7. For more information about our programs toenhance engagement in your organization, pleasecontact us at: Level Up Leadership, Inc. Office: 919-510-0426 Joy’s Mobile: 919-609-0704 www.levelupleadership.com joy@levelupleadership.com

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