Construction companies often focus on acquiring customers and closing deals and sometimes, they overlook an aspect of the business that affects the bottom line just as much—their employees. When employers neglect their own people, the result is a disengaged workforce with lower productivity. In the worst cases, the workplace environment becomes toxic and the business could fail.
According to the State of the American Workplace Report in 2017 by Gallup, only 33% of employees are actively engaged. The remaining are psychologically unattached to their work, putting time but not the energy or passion to complete it. A significant subset is not only unhappy but also resentful of their work, actively undermining their colleagues’ work and speaking ill of the work to potential clients.
In total, Gallup estimates that disengaged employees cost $483 billion to $605 billion each year in lost productivity. Today we are going to look at the real cost of a disengaged construction workforce.
Lack of Engagement Kills Productivity
When employees do not have the energy and passion for work, they will simply go through the motions, taking more time to finish work. Eventually, a disengaged employee will show up at work less and less, either due to lack of motivation or they are looking for a new job. Their workload will be forced on other employees, further reducing inefficiency. If not addressed, the increased workload on employees who show up will result in their disengagement and the cycle starts again.
Employee disengagement not only affects productivity but safety as well. Disengaged employees make more errors in their work than their engaged colleagues. In dangerous workplaces such as construction sites, their lack of focus and attention can cause accidents. Not only can these result in expensive lawsuits, but most devastatingly, they can also cause loss of life.
Disengaged Workers Create a Toxic Culture
Actively disengaged employees do not just keep their general dissatisfaction to themselves. They also act on this unhappiness and affect the work of engaged employees. Unhappy workers spread the discontent through their words and actions, or worse, disrupt the productivity of otherwise engaged employees.
Disengaged managers also create a cascading effect on their teams. Employees who are managed by discontent supervisors are less likely to be engaged themselves. In a sense, disengagement is contagious if left unchecked. When other employees feel the effects of low engagement, the overall level of morale can decrease and the discontent spreads.
Once unhappy employees start leaving, it will be more difficult for a company to shape a positive culture. In addition, high employee turnover will affect the perception of the organization’s culture, making it harder to attract new employees. With the current labor shortage in the construction industry and the difficulty of acquiring fresh talent, employee disengagement can be fatal to a business.
Unhappy Workers Affect Customer Service
Building a company’s brand from the ground up is one of the challenges of doing business in construction. It takes a lot of time, but it only takes one disengaged employee in the sales force to show bad customer service to degrade the brand. Consider the effects of material supply delivery delays and unmotivated interactions of employees with clients. Clients can sense disengaged employees and they will see it as a reflection of their employers. It will be harder to drive repeat business and foster brand loyalty with disengaged employees.
The Bottom Line of Employee Disengagement
The above-mentioned effects of employee disengagement can be hard to quantify. However, we can use the metrics determined by Gallup to calculate the effect of employee disengagement on a company’s bottom line.
To put it into perspective, consider a small company made up of 150 employees. Using the Gallup data that only 33% are actively engaged, we can calculate that around 100 employees are disengaged with their work. If the average salary of employees is at $30,000, that means employee disengagement is costing the company around $3 million.
With an overall payroll cost of $4,500,000, the total cost of $3 million a year can be staggering, especially for startups.
Looking at the effects of discontent workers, both inside and outside a company, it is clear that employers need to focus on employee engagement. This issue presents very real financial costs that build up the longer the problem persists. For better productivity, safety, and profitability, cultivate a motivated and driven workforce.
About the Author:
Chris Woodard is the Co-Founder of Handle, where they build software that helps contractors, subcontractors, and material suppliers secure their lien rights and get paid faster by automating the collection process for unpaid construction invoices.