The High Cost of Unhappy Employees to Businesses SHRM estimates the costs of losing an employee to a 6 to 9 months' salary on average. “For a manager in the US, making $60,000 to $120,000 a year, there's a $20,000 to $30,000 cost in recruiting and training expenses.”
Gallup found that actively disengaged employees cost the U.S. $450 billion to $550 billion per year; that number doesn't even take into account the "not engaged" employees.
Not only does job dissatisfaction decrease work performance and morale, it can also negatively impact your bottom line. When employees are not engaged in their work, they are less likely to have the motivation to be productive and carry out quality services.
The average cost. According to Gallup, disengaged employees cost their company the equivalent of 18% of their annual salary. Other sources calculate losses at up to 34% of a disengaged employee's annual salary.
An entry-level employee turnover cost is between 30% and 50% of their annual salary to replace. A mid-level employee turnover costs 150% and above of their annual salary to replace. A high-level or highly specialized employee costs approximately 400% of their annual salary to replace.
Labor costs can account for as much as 70% of total business costs; this includes employee wages, benefits, payroll and other related taxes.
The Financial Cost of Poor Employee Productivity
Suppose you are paying an annual salary of $30,000. In that case, a poorly productive employee might be wasting anywhere from $10,000 to $15,000 of that salary on disengagement, absenteeism, and contributing to a negative environment.
How costly is job stress? Job stress is estimated to cost American companies more than $300 billion a year in health costs, absenteeism and poor performance. In addition, consider these statistics: 40% of job turnover is due to stress.
Employee stress can cause low employee engagement, lack of focus and productivity, poor performance, and an increase in absences and tardiness.
Employee turnover costs can have a significant impact on your bottom line. Depending on the size of your business, the total costs of replacing an employee varies from 30-150% of their salary. This amount represents a substantial expense for any size business.
Employee dissatisfaction often leads to negative reviews of services provided, poor quality work and higher turnover.
Unhappy, disgruntled employees can create a tense, negative and stressful atmosphere in the workplace, which affects the overall productivity of the team. These same employees can cause a hostile work environment.
15% to 20% of total payroll in voluntary turnover costs, on average, due to burnout.
The statistics on unhappy employees are alarming. According to Gallup, 85% of individuals worldwide are dissatisfied with their jobs.
Happier employees are more engaged. And engaged employees show increased productivity as well as a far lower rate of absenteeism from work. A healthy work environment matters. A positive work culture encourages employee friendships, improves personal well-being, and ultimately benefits your bottom line.
Individuals under stress may have reduced ability to make critical decisions, as their thought process is clouded with personal issues that lead to errors. Interpersonal skills may deteriorate, as individuals under stress may not filter comments, thereby offending co-workers or clients.
Stress related presenteeism and absenteeism are directly costing Australian employers $10.11 billion a year.
More than 80% of US workers have reported experiencing workplace stress, and more than 50% believe their stress related to work impacts their life at home.
Burnout costs the Australian economy $14 billion each year, and has been recognised as an 'occupational syndrome' by the World Health Organisation (WHO). It is a health condition caused by the working environment and/or activities related to your professional work.
Assuming those rates, they estimated the annual cost to Australian employers of workplace bullying to be between $6 billion and $36 billion. In the ensuing decades, on any measure, the estimated cost of workplace violence to the Australian economy must have soared.
The 70 percent rule, in a business context, is a time management principle suggesting that people should withhold a significant amount of their working capacity for better productivity, engagement and work-life balance.
The 85% rule suggests that you should fine-tune the amount of support you use depending on the success rate you're experiencing. If you're getting more than one out of every five problems wrong, you might want to add extra help. If you're getting nearly all the problems right, it's time to up the difficulty.
Happy employees are 12 percent more productive than the average worker, and unhappy employees are 10 percent less productive.