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The Enormous Cost of Unhappy Employees

Most business owners know that unhappy employees cost them money, but you’ll be shocked at how high that cost actually is.


A few weeks ago, we talked about why happiness at work matters; this week I’d like to share the flip side of that: the gigantic cost of unhappy employees.

Employee engagement has been a hot topic for several years now, but what does it really mean and how do you know whether your employees are engaged at work? And why does it matter?

Gallup’s State of the Global Workplace reported on employee engagement in more than 140 countries and divided employees into three categories. Below is an excerpt from Gallup’s study:

  • Engaged employees work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
  • Not Engaged employees are essentially “checked out.” They’re sleepwalking through their workday, putting time–but not energy or passion–into their work.
  • Actively Disengaged employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what their engaged co-workers accomplish.

It’s easy for us to think the problem lies with others, but the statistics give us a disturbing truth. Through its research, Gallup found that 87 percent of workers worldwide and 70 percent of employees in the U.S. (84 percent in Canada, 83 percent in the U.K.) are either not engaged or actively disengaged. That means only 30 percent of U.S. workers are driving their organizations forward.

If you’re one of that 30 percent (or 13 percent worldwide), you know how frustrating it is when the majority of your co-workers are less committed to their jobs. In companies with low engagement, this frustration often causes swift turnover of top talent, since these people quickly realize they’re carrying the weight alone.

The costs of low engagement aren’t limited to turnover and recruitment. 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. (Hello, Congress? We’ve found a way to fix the economy.)

On the other hand, organizations with high employee engagement will derive benefits in addition to happy employees: The stock value has higher earnings per share, and the businesses experience 22 percent higher profitability, 21 percent higher productivity, 10 percent higher customer engagement, 25 percent to 65 percent lower turnover, 37 percent lower absenteeism, 28 percent lower shrinkage (theft), and 48 percent fewer staff safety incidents.

If you’re concerned that your employees may be among the 84 percent globally who aren’t engaged at work, an easy, evidence-based way to find out is to ask them 12 questions via Gallup’s Q12 survey. (If you want Gallup to tabulate them for you and give you pretty charts and graphs, it’ll be happy to do that.)

For those who want to start boosting engagement without asking those questions first, Gallup offers three main ways, based on research:

  1. Hire talent–the right people for the right jobs;
  2. Nurture their skills–it builds their sense of purpose as well as abilities;
  3. Enhance their well-being–in body, mind, emotion, and sense of meaning.

You may not be ready to offer nap pods, treadmill desks, and free healthy food to your employees, but every journey to boost employee engagement begins with a single thought.

This article was originally published on in August 2014.
Ariana Ayu is the author of the Business Mojo column on (a website and magazine geared toward entrepreneurs) which was published between 2014-2016. Ariana is the CEO and founder of several companies, including Ayutopia International, LLC, which develops profitable collaborative corporate cultures, personal celebrity brands, and custom branded websites. Her press and media appearances include USA Today, International Business Times, ABC, CBS, CBS Money Watch, the CW, Eyewitness News, FOX, NBC, Newsday,Virtual-Strategy Magazine, World’s Luxury Guide,, Miami Herald, BlogTalkRadio, and Hollywood Industry, among others.

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