Not Thriving at Work prevents from Thriving at Life

The Societal Cost of Disengagement

Olivier Onghena-’t Hooft

Founder & Chairman, GINPI
Author of ‘The Book of Noble Purpose‘

More than ever, the need for noble purpose in Life and the economy is a fact! With 77% of currently employed workers in the world being disengaged or actively disengaged, the cost for the global economy is close to 9 trillion USD. And the ‘human cost’ of this massive and global disengagement is nearly unmeasurable.

The facts behind the figures

While there has been an almost exponential growth in universal GDP since the start of the Industrial Revolution, and even though this has gone hand in hand with the material progress of the world’s population (although there are still huge imbalances between the North and the South), it is alarming to note that these developments have also gone hand in hand with a massive increase in the use of medicines and anti-depressants.

In other words, it is not because we are richer that we are happier! Or rather, that we feel happier. What is going on?

According to Gallup’s very interesting State of the Global Workplace 2023 Report, the majority of the world’s employees (59%) are not engaged or ‘quiet quitting’. Those are the ones that have a transactional relation to the work they do: they go for the minimum effort and surely don’t go for the extra mile; they watch the clock, they are psychologically disconnected, and they don’t find much meaning in what they do, and they are more likely to be stressed and burnt out.

‘77% of currently employed workers in the world are disengaged.‘

*Gallup’s State of the Global Workplace 2023

An additional 18% of the world’s employees are actively disengaged, or ‘loud quitting’. Those employees take actions that directly harm the organization, undercutting its goals and opposing its leaders’ as the Gallup report states. Although this is ‘only’ about 1 in 5 of the world’s employees, the negative effect and the collateral damage they cause can’t be underestimated. On themselves, in their direct work environment, at home and in their social Life.

The good news is that there is a continuous yet slow trend of increasing thriving employees (from 12% in 2009 to 23% in 2022), but these engaged people count for only 23% of the world’s employees. They are engaged because they feel connected with the work they do, with what the organization stands for, and with the leaders leading them. Often, these employees consider their work meaningful and bring added value to their lives.

‘The cost of low engagement is 9% of global GDP.‘

The massive cost of low engagement is estimated at nearly 9 trillion USD. That is 9.000.000.000.000 USD! Per year! That astronomical amount accounts for an even astronomical 9% of global GDP.

The impact on society and the economy

This has significant societal and economic costs, affecting both individuals and organizations. Here are some of the critical consequences of workplace disengagement.

Lost potential & decreased productivity

Disengaged employees often have untapped potential. When this potential (we all have a potential 100% ‘container’ of experience, expertise, passion, drive, ambition, intentions, … to offer to ‘the market’) is not harnessed, it represents a loss of talent and creativity that could benefit both the individual and the organization. And, by extension, the economy and the society.

Disengaged employees are less motivated to perform their tasks and take on their roles to the best of their abilities, resulting in decreased productivity. We have seen people shifting their focus from what makes them thrive to how they can hide not to take on more work, protect themselves from overload, and stop going the extra mile. This can lead to missed deadlines, errors, decreased agility and reduced overall output.

Increased employee turnover

‘61% of actively disengaged seek a new job compared to a much lower 43% when engaged’

Disengaged employees are more likely to seek new job opportunities, which can result in higher turnover rates. High turnover is costly for organizations due to recruitment, training, and onboarding expenses. According to the Gallup study, the percentage of employees watching for or actively seeking a new job goes up to 61% when actively disengaged, compared to a much lower 43% when engaged.

Other data show that engaged employees require a 31% pay increase to consider changing jobs elsewhere, compared to a 22% pay increase for actively disengaged employees.

Reduced innovation

Disengagement can stifle creativity and innovation within an organization. When employees are disengaged, they are less likely to contribute with new ideas, problem-solving strategies, process improvements, market adaptations, etc.

Innovation also often comes from creative processes in interaction with others. We observe that low engagement will make people close themselves off, fall back on themselves, and have way less sharing and creative interactions with others.

Lower quality of products and services

“Disengagement leads employees to disconnect from the products and the services.”

Employee disengagement can lead to a decline in the quality of products and services, negatively impacting an organization’s reputation and customer satisfaction. As people start disconnecting from the leaders and, by that, from the organization, they finally begin disconnecting from the products and the services.

Health and well-being issues

“56% of actively disengaged employees are stressed, whereas 30% of engaged employees feel stress”

Employees disengaged at work may experience stress, burnout, bore out, and related health problems. This results in increased healthcare costs and absenteeism. And even in suicide.

The Gallup report states that when employees are engaged at work, they report significantly lower stress in their Lives: 30% of employees felt stress when engaged, compared to 56% when actively disengaged.

Negative workplace culture

In ‘The Book of Noble Purpose’ (LannooCampus, 2019), I explain what happens with organizations with poor leadership and a toxic culture: it leads to massive disengagement at work. We observe work environments with low morale, infighting, many conflicts, silo thinking and acting, a lack of trust among employees, power games, hidden agendas, etcetera. This further perpetuates disengagement and reduces overall job satisfaction.

Impact on communities

The economic impact of workplace disengagement extends beyond individual organizations. When businesses suffer from disengagement-related issues, it can affect local economies, job markets, and community well-being.

Financial costs

“It costs much less under the condition that there is the right leadership safeguarding the right humane culture”

The economic costs of disengagement, coming from the untapped potential and the reduced performance, include lost revenue, increased turnover costs, and the expenses associated with addressing disengagement through employee engagement and motivation initiatives, training and development, and management interventions.

We regularly see that, too often, organizations with low engagement and satisfaction levels must invest massively in trying to boost the motivation of employees from the outside. I believe motivation, leading to engagement, should come from the inside. Hence, it costs much less under the condition that there is the right leadership safeguarding the right humane culture.

Societal and Mental Health Implications

“It’s not because we became materially richer that we feel happier.”

Disengagement can have a broader societal impact by contributing to overall dissatisfaction with work and life. This can lead to mental health challenges, such as depression and anxiety, which affect individuals and their families. As I said before, it’s not because we became materially richer that we feel happier!

Noble purpose it should be!

Addressing workplace disengagement is critical to mitigating these societal and economic costs. Organizations can take steps to improve employee engagement through better leadership, clear communication, opportunities for skill development, recognition, and a positive work culture. By investing in the well-being and engagement of their employees, organizations can enhance productivity, reduce turnover, and contribute to both individual and societal well-being.

That’s why I am convinced that organizations need to become ecosystems in which people can realize themselves through their meaningful contributions to the noble purpose of the organization. In organizations with a short-term vision, where financial results are the only yardstick for success, this is not possible because these take no account of the personal development needs of their employees. On the contrary, people are held firmly in check and trapped in a modern form of slavery by a leadership based on command and control. Values are, at best, theoretical concepts to hang on the wall in the HQ entrance hall, but no one experiences them as a real compass for their behaviour.

“Organizations need to combine a unique noble purpose with lovinship (loving and caring leadership) and a sustainable strategy to serve the noble purpose, with a value-based culture in a holistic humanistic approach.”

Society is evolving so quickly that organizations, like snakes, must shed their old skin to become integrated systems that seek to serve society through a clear, noble purpose. This noble purpose must be visibly embraced by the leaders, who must be genuinely concerned about making a positive impact and finding ways to achieve this through the people in their organization. Those same leaders must further build and perpetuate a culture in which values and principles are the foundation for everything that the organization does, giving direction for what is acceptable and appropriate and what is not.

By combining a unique noble purpose, a coherent and walk-the-talk lovinship (loving and caring leadership), a sustainable strategy that is there to serve the noble purpose, and a value-based culture in a holistic humanistic approach, organizations gain substantially in strength and become what I call ‘Houses of Noble Purpose’. And that is when engagement substantially will increase, and satisfaction will go through the roof.

I ask you,

“Do you think your organization is a House of Noble Purpose? And if it isn’t (yet) what would it take to become one?”