It is extremely important for employees to feel appreciated at work. According to a study by Bersin & Associates “companies that provide ample employee recognition have 31% lower voluntary turnover rates than companies that don’t”. There are a number of costs associated with an unhappy workforce, for example:
Costs Associated with High Turn-OverWhen people do not feel appreciated, studies show that they will often leave the position. Employers often overlook this cost because they may not connect this to employee appreciation however the cost of a lost employee adds up. According to some estimates, welcoming a new hire into the company could cost as much as $3,500 for recruitment and as much as $1,200 and 32 hours per year in training. This is an average of $4,700 and several days in lost profits and productivity which can be directly attributed to lack of appreciation for an employee.
Costs Associated with Increased AbsenteeismA dissatisfied worker is more likely to take a sick day to avoid work because an unhappy worker will find reasons to avoid the workplace. This can cost the company money over a period of time because the company policy may require them to pay the employee for their sick days even when they are not at work resulting in reduced productivity and reduced profits.
Costs Associated with PresenteeismThis is a new concept used to describe a situation where an employee reports to work when they are actually ill. Many employees do this because they do not feel that their employer will understand if they need to take a sick day. This can lead to reduced productivity at work by the ill employee and reduced productivity by those with whom the employee comes in contact who ultimately becomes ill.
Costs Associated with Decreased Productivity & TheftEmployees who are unhappy and who feel unappreciated tend to be less productive at work. Studies also reflect that unhappy employees steal from their employers at a higher percentage, thereby costing the employer millions annually.
About the Author: Corecia Davis
Corecia is Vice President of Human Resources professional with a demonstrated history of working in the real estate industry. Skilled in Negotiation, Human Resource Development, Human Resources, Management, and Legal Compliance, she has a Doctor of Law (J.D.) focused in Law; Employment Law from Pepperdine University School of Law.