The EEA Cost of Disengagement Analysis
Gallup estimates that companies lose up to $8.8 trillion worldwide as a result of low employee engagement, which does not include customer or other stakeholder disengagement. A recent McKinsey & Co. study puts the possible cost at up to $355 million on in the US at large companies.
How much waste is your organization burying into the bottom line because of sub-optimal engagement of employees, customers, distribution partners or other key stakeholders? This new service can help you find out, according to the Enterprise Engagement Alliance.
The increased interest in implementing more strategic and systematic approaches to management across the enterprise has led the Enterprise Engagement Alliance to create a new research group to help organizations not only evaluate the effectiveness of current stakeholder engagement practices to enhance their results, but to evaluate the actual cost of stakeholder dis-engagement to their organizations. The EEA’s research group is based on the work originally produced by the Forum for People Performance Management and Measurement at the Medill School at Northwestern University, co-founded by Bruce Bolger, Enterprise Engagement Alliance founder, in 1999, with major support from The Motivation Show and about a dozen leading incentive and recognition companies at the time.
Within weeks of its official formation of the EEA’s new research group this summer, it announced the receipt of a contract to create a special report on the European Union Corporate Sustainability Directive that will be published by the organization early next year.
Companies are facing the same challenges in the workplace that they experienced in manufacturing in the last century when many simply built high levels of defects into their bottom lines. This only changed when the Japanese in particular adopted total quality management practices starting in the 1970s that eventually enabled them to make enormous inroads into the US market for automobiles, appliances, high fidelity equipment, photography and many other industries by delivering a perceptively higher level of reliability in their products and services.
Organizations have continued to bury the high costs of disengagement in their business models in the belief that this waste could not be measured, when in fact basic analytics proven in manufacturing and research can provide highly useful gauges that not only help pinpoint the cost of low engagement but also point to the potential impact on the bottom line.
What is worker, customer, or other stakeholder disengagement costing your organization? Using methodology proven through research, total quality management and ISO (International Organization for Standardization) standards, the EEA says it can help organizations achieve a better handle not only on the costs but on the potential opportunities for performance improvement through people.
Based on the extensive experience of its founders and past research analyzing the cost and benefits of having engaged customers and employees, the EEA says the service helps organizations estimate the cost of employee, customer, or distribution partner dis-engagement; the potential causes, and the realistic potential benefits of enhancing engagement. Costs can be measured in terms of both dollars and poor stakeholder experiences resulting in frustration and flight risk.
Depending on available data, the EEA claims it can provide estimates for the cost of disengagement of any stakeholders. This can be measured by customer, employee, or other stakeholder turnover; cost of stakeholder replacement; productivity; quality; low referral rates; accidents; lawsuits; media controversy. The process can also include a means of determining the causes and possible solutions, based on an estimated realistic return on investment.
The EEA says it will not take on any client without a preliminary and complimentary 60–90-minute evaluation with key management to confirm that the process will yield meaningful results. Success depends on the availability of the necessary data and/or the organization’s appetite for finding the data. Based on client requirements, the EEA recommends starting with one specific employee group or location to verify that conditions exist for effective analysis. This involves one more meeting with key management stakeholders, including the CFO or equivalent, generally the CEO, and leadership of the stakeholder group being analyzed—employees, customers, supply chain and distribution partners, volunteers, etc. The group receives a checklist of questions related to available metrics, costs, and practices well in advance of any meetings.
Based on the data provided, the EEA uses commonly accepted human capital standards calculations to provide an estimate of the cost of disengagement potential causes, what realistically can be done to address the issue, and the potential return on investment of such an effort.
For More Information
Bruce Bolger, Founder
Enterprise Engagement Alliance
914-591-7600, ext. 230
ESM Is Published by The EEA: Your Source for Effective Stakeholder Management, Engagement, and Reporting
Through education, media, business development, advisory services, and outreach, the Enterprise Engagement Alliance supports professionals, educators, organizations, asset managers, investors, and engagement solution providers seeking a competitive advantage by profiting from a strategic and systematic approach to stakeholder engagement across the enterprise. Click here for details on all EEA and ESM media services.
1. Professional Education on Stakeholder Management and Total Rewards
- Become part of the EEA as an individual, corporation, or solution provider to gain access to valuable learning, thought leadership, and marketing resources to master stakeholder management and reporting.
- The only education and certification program focusing on Stakeholder Engagement and Human Capital metrics and reporting, featuring nine members-only training videos that provide preparation for certification in Enterprise Engagement.
- EEA books: Paid EEA participants receive Enterprise Engagement for CEOs: The Little Blue Book for People-Centric Capitalists, a quick implementation guide for CEOs; Enterprise Engagement: The Roadmap 5th Edition implementation guide; a comprehensive textbook for practitioners, academics, and students, plus four books on theory and implementation from leaders in Stakeholder Management, Finance, Human Capital Management, and Culture.
- ESM at EnterpriseEngagement.org, EEXAdvisors.com marketplace, ESM e–newsletters, and library.
- RRN at RewardsRecognitionNetwork.com; BrandMediaCoalition.com marketplace, RRN e-newsletters, and library.
- EEA YouTube Channel with over three dozen how-to and insight videos and growing with nearly 100 expert guests.
3. Fully Integrated Business Development for Engagement and Total Rewards
Strategic Business Development for Stakeholder Management and Total Rewards solution providers, including Integrated blog, social media, and e-newsletter campaigns managed by content marketing experts.
4. Advisory Services for Organizations
Stakeholder Management Business Plans; Human Capital Management, Metrics, and Corporate Sustainability Reporting for organizations, including ISO human capital certifications, and services for solution providers.
5. Outreach in the US and Around the World on Stakeholder Management and Total Rewards
The EEA promotes a strategic approach to people management and total rewards through its e-newsletters, web sites, and social media reaching 20,000 professionals a month and through other activities, such as:
- Association of National Advertisers Brand Engagement 360 Knowledge Center to educate brands and agencies.