Plug One of The Hidden Financial Drains in Your Organization!
Your organization will profit when you plug the dollar “drip, drip, drip” that employee turnover and disengagement steals from your bottom line. Because the cost of employee turnover and disengagement does not show up on a P&L statement, it’s easy for organizations to overlook both when analyzing expenses. Google’s 2025 State of the Global Workplace report showed that in the U.S. only 31% of employees were actively engaged (enthusiastic, strong contributors), 17% were actively disengaged (pessimistic, sometimes negative, non-contributors) and the remaining 52% were basically not engaged (indifferent – minimum contributors).
Employee Turnover
Too often organizations look the other way and accept employee turnover as a nuisance, but necessary fact of business life. If your organization has a revolving door when it comes to hiring employees, you could increase profits just by implementing better hiring practices.
As an example of how turnover affects a business, let’s consider a company with a thousand employees which annually experiences 10% turnover. In a year’s time, 100 employees will leave and the estimate of that cost falls between 33% and 200% of those employees’ annual salary. These departing employees will ultimately be replaced by new employees. While new employees are usually highly motivated, during their first six months they will be, on average, about 50% productive; that means up to 50% of their salaries during that time provide no return for the organization. After all, it takes a while for new employees to become fully productive because they may lack the training and experience that comes with time. Given the average U.S. salary of $63,800, that translates into a loss of productivity of $15,950 per new employee. Eventually, with the right supervision and encouragement, they may become part of the 31% of the organization’s employees who are motivated, competent, and productive.
One place to plug the leak is to stop hiring the wrong people in the first place. Too many HR professionals are resigned to hiring two to three people in order to find one who stays six months or more. By anticipating this type of new employee failure, they have surrendered rather than taking a proactive stance toward turnover. One often overlooked factor is how job candidates fit your corporate culture and match the position for which they have been selected. It’s likely you have picked candidates who have the qualifications for success, somewhere, but maybe not in the job you seek to fill.
Disengaged Employees
One of the factors contributing to disengaged employees is “job fit”. An extensive study conducted years ago by the Harvard Business Review concluded that “fit” with a job is more important than any other factor in predicting an employee’s success. Yet, “job fit” is seldom included in an organization’s hiring process. Organizations hire good, talented people, but put them in jobs they do not fit. Think of it this way. Imagine a corporation inviting Tiger Woods or Scottie Scheffler to their annual golf tournament and asking them to conduct a seminar on diving at the country club’s swimming pool. Though this is a ridiculous example, it is no more nonsensical than what some organizations have done with people they’ve hired. Simply reassigning employees to jobs for which they are better suited can go a long way to improving engagement (and reducing turnover).
A second factor contributing to employee disengagement (and turnover) is poor management. Far too often, organizations promote an excellent, hard-working contributor to a managerial role only to lose on both counts. They lose a valuable contributor and end up with a poor manager, one ill-suited for the position despite the organization spending money on management or leadership training. Poor managers are often guilty of the following:
- Lack of Respect – not showing respect for their employees’ work or personal time.
- Poor Communication – unclear expectations, lack of honest feedback, or insufficient communication.
- Micromanagement – overly controlling management styles.
- No Career Growth – failing to support employee development or promotion opportunities.
- Lack of Empathy – an inability to handle difficult conversations or show concern for employees.
Numerous studies have shown good managers are crucial for retention, influencing engagement, and making a job great while bad managers can make an otherwise good job unbearable, leading to disengagement or turnover.
A Simple Solution for These Complex Challenges
Our PXT Select assessment addresses these talent management challenges in a simple way – by proactively identifying your organization’s needs and matching people to roles where they can perform successfully and drive results – you can’t rely on resumes, references, and prior experiences alone. You need tools that account for the complexity of a human being – something that goes beneath the surface and collects objective information.
In addition to our PXT Select assessment, we have a suite of assessments which include our Emotional Intelligence assessments, our Everything DiSC assessments, our Customer Service assessment, our Integrity assessment, and our 360o surveys as well as culture consulting and a host of other training programs. Check us out at www.GreatLakesProfiles.com. We’re here to help, reach out to us via email at Jim@GreatLakesProfiles.com or call me at (248) 388-0697.