According to research by McKinsey published in an article last week, employee disengagement and attrition could cost a median-size S&P 500 company up to $355 million a year in lost productivity.
The research found that employee satisfaction and commitment levels directly correlate with self-reported performance and well-being.
It identified 12 key factors that impact satisfaction and commitment, with the top six accounting for nearly two-thirds of the total cost to companies from disengagement.
Six distinct employee groups were identified based on satisfaction and commitment levels being influenced by a specific combination of the drivers of satisfaction and commitment for each group.
Making up 10% of the workforce, are those ready to leave due to dissatisfaction or feeling underappreciated.
Accounting for 11%, disrupters are highly disengaged and can negatively impact others.
Do just enough to get by and make up 32% of the workforce.
At 5%, work multiple jobs concurrently and can be both beneficial and detrimental to a company.
The backbone of the company, contributing 38% of the workforce.
Although only 4%, bring significant value to the company.
A central argument of the article is that companies can enhance productivity by addressing the needs and concerns of each group differently, with strategies ranging from improved compensation packages to more flexibility and autonomy, to career development and advancement opportunities.
The research also explored the working models of the 'thriving stars', and how various organizational conditions affect their performance.
It found that high-performers flourish more in hybrid and remote work environments, with 45% working remotely and 36% in hybrid settings, as opposed to only 19% in traditional in-person models. This suggests that offering flexibility and autonomy may attract and retain top talent.
However, this presents a challenge for leaders uncomfortable with virtual collaboration.
The article suggests that instead of enforcing rigid in-office schedules, leaders should engage with these employees and consider how to enhance their impact through mentorship and collaboration across different work models.
This strategy could also help keep engagement and performance levels sustainable over time.
The article concludes by advising companies to focus on keeping their 'thriving stars' satisfied while also creating favourable conditions for other workers, potentially leading to a more resilient and engaged workforce.