Three in five workers are disengaged and costing UK economy billions, study finds

Experts urge employers to give greater focus to employee engagement and ensure it is not just a ‘buzzword’

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Three in five employees feel disengaged from their workplace as organisations struggle to form a post-pandemic work culture in the hybrid world, research has found.

According to findings from a poll by recruitment firm Robert Walters, which surveyed 2,000 white collar professionals, the UK could be facing a ‘disengagement crisis’ as almost half of employees said their workplace had become unrecognisable in the past 12 months – with high staff turnover (54 per cent), fewer people working from the office (49 per cent) and a decline in team socials (43 per cent) being the main reasons cited.

In addition, factors including the gloomy economic outlook (32 per cent) and the appeal of moving abroad (28 per cent) were contributing to employees disconnecting from the workplace, investing less of themselves in their work and opting to simply ‘get the work done’, the analysis found.

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Because of these levels of disengagement, separate research from employee benefits platform Perkbox estimated that the disconnect was costing the UK economy more than £340bn every year in lost training and recruitment costs, sick days, productivity, creativity and innovation.

The same research also revealed that a disengaged employee was costing their organisation an estimated fifth of their annual salary – for instance, one unengaged worker on an average salary of £35,000 would cost a business £7,000.

Commenting on the findings, Toby Fowlston, CEO of Robert Walters, said he was “somewhat surprised” to see the findings from the research – especially given the investment made by employers into workplace culture over the past five years, as well as the more recent focus on luring workers back into the office.

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“What is apparent here is the traditional tactics used to build a lively, inclusive and social workplace culture are simply not cutting it. The hybrid working world and subsequent decline in office attendance is having a detrimental impact on employee engagement and companies must act fast to keep employees engaged and attract the best professionals,” he added.

At the same time, the Robert Walters poll found that, amid the tight labour market conditions, employers were more nervous about losing workers and were offering disengaged employees pay rises to retain them.

According to the poll, it has been a record summer of mid-year salary increases for white-collar professionals – with almost a third reporting that they received either a 5-10 per cent pay increase or a spot bonus of up to £1,000.

However, Fowlston said that, despite many employers giving mid-year pay reviews to increase engagement and retention, this was a “short-term remedy”.

“Much greater focus needs to be given to the wider topic of employee engagement – which should no longer be considered a ‘buzzword’ or an intangible, immeasurable HR concept that is ‘nice to have’,” he added.

Gemma Dale, lecturer at Liverpool John Moores University and co-founder of The Work Consultancy, said it was difficult to determine whether or not this was a crisis or the outcome of complex circumstances, from the pandemic to more recent issues relating to the cost of living crisis and a buoyant talent market providing talented employees with more opportunities to move jobs. However, she said it was becoming clear from multiple surveys that employees were “seeking a new deal at work. This includes, as we know, flexible forms of work, but also a greater sense of purpose and meaning at work.”

Proposing ways for employers to increase engagement amid economic uncertainty, Alex Pusenjak, vice president of people and culture at Fluent Commerce, suggested it was important for organisations to create a culture that people enjoy and thrive in – making work fun, thinking of creative ways to engage teams, providing health and wellbeing initiatives, and setting an example when it comes to work-life balance. “For example, we have staff who finish their day early to coach sporting teams, volunteer and do school pick-ups and drop-offs,” he said.

Pusenjak warned that, if not prioritised, culture can go in the opposite direction to what is wanted. “Negative morale is contagious and it can slow down other people’s progress and motivation very quickly,” he said, adding that employers need to “identify what the team needs holistically to be engaged and thrive".