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What is the cost of employee disengagement?



According to research:


  • On average, 17.2% of employees

are actively disengaged at work;

the cost of disengagement is 34%

of an employee's salary.  That means 

for every six employees salaried

at $50,000, you are losing $17,000.

  • The average economic cost of

replacing a single employee:

213% of one year’s compensation

for that position.

  • The Fortune list of 100 best companies to work for outperformed the Russell 1000 index throughout the decade ending in 2016 by nearly five percentage-points.

  • The top 40 public companies ranked best places to work in 2019 by Glassdoor beat the S & P by 400%.


  • Potential increase to a company’s net value over a three year period from retaining a sales person for a third year: as much as $1.3 million.

Compared with employees working for companies ranked in the bottom quartile for trust, employees working for companies in the top quartile reported:


  • 106% more energy 

  • 76% more engagement at work 

  • 50% more productivity

  • being 50% more likely to stay with their employer over the next year

  • 88% more likely to recommend their company to family and friends as a place to work

  • enjoying their jobs 60% more

  • feeling 70% more aligned with their companies’ purpose

  • feeling 66% closer to their colleagues

  • 11% more empathy for their workmates

  • being 41% less likely to depersonalize coworkers

  • experiencing 40% less burnout from their work

  • feeling 41% more accomplished

(See HBR article "The Neuroscience of Trust" by Paul J. Zak, professor of economics, psychology, and management at Claremont Graduate University and founding director of the Center for Neuroeconomics Studies.)


  • In 2008, the CCP Global Human Capital report estimated the annual loss in productivity to American businesses due to workplace conflict at $359 billion.

  • In 2012, Gallup estimated the annual loss due to disengagement at $450-550 billion.

In an article for Huffpost, Lattice CEO Jack Altman offers the following example:


If you are a 150 person company with 11% annual turnover, your costs will be:


  • $25k per person on hiring

  • $10k on each turnover and development

  • $50k average productivity opportunity cost when refilling a role


Your total annual cost of turnover would be: $1.57 million.


Reducing this by just 20% would immediately save you over $300,000. And that says nothing of the emotional headache and cultural drain felt from losing great people.

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Real expenses of employee turnover include:

  • Hiring

  • Onboarding

  • Training

  • Ramp time

  • Higher business error rates

  • General loss of engagement

  • Negative cultural impact


According to the latest research by the Trust Edge Leadership Institute, what employees rank most important in their job is having an employer they can trust.


Do your employees trust you?  

Do they trust one another?


Compliance laws are meant to ensure ethical conduct.  But that hasn’t helped Wells Fargo, Novartis, or United Airlines, among many others.  Why don’t they work?

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Ethics governs the vast gray area between

what is legal and what is illegal.  Trying to

legislate ethics is like trying to reproduce

the Mona Lisa from a child’s paint-by-numbers

art set.  You end up with an embarrassing

imitation that is an insult to the real thing.

How do you create a culture of ethics?  

It’s not as hard as you think. But you need

to follow the right path if you want to get

there.  And you need a guide to show you the way.


Can you afford to keep drifting on the sea of ethical confusion?

Are you ready to discover the secrets of being an ethical leader?

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