The $355M cost of attrition, disengagement: McKinsey

Employee disengagement and attrition is a multimillion-dollar problem for high-performing companies, according to a Sept. 11 report from McKinsey & Co

The consulting firm surveyed 15,366 workers in seven countries – the U.S., the United Kingdom, Australia, Canada, Germany, India and Singapore — about job satisfaction, commitment, well-being and self-reported performance. 

More than half of the workforce at a typical organization is disengaged, according to McKinsey. Thirty-two percent are mildly disengaged, putting in the time to fulfill job requirements, but lacking commitment to the company and performing below average. Eleven percent of the workforce was classified as "disruptors" — actively disengaged and likely to demoralize others — while another 10 percent of "quitters" are likely eyeing or heading for the door. 

Midsize S&P 500 companies that see typical attrition — 10 percent, coupled with a 56 percent disengagement rate — are losing an estimated $228 million per year as a result, according to the report. Those with high attrition rates — 20 percent, along with 56 percent disengagement — could be losing up to $355 million, McKinsey analysts estimate. 

That adds up to $1.1 billion in lost value over five years, per the report. 

To boost employee satisfaction, commitment and performance, McKinsey recommended leaders zero in on these six disengagement drivers. Doing so could save an estimated $56 million per year, according to the firm: 

1. Inadequate total compensation

2. Lack of meaningful work

3. Lack of workplace flexibility

4. Lack of career development and advancement 

5. Unreliable and unsupportive people at work

6. Unsafe workplace environment 

Read more about McKinsey's methodology and the different types of workforce disengagement here

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