Low Employee Engagement May Reduce Global GDP by as Much as 9%

By Alana Smart / September 10, 2024 / Blog ,

Low Employee Engagement May Reduce Global GDP by as Much as 9%

Loneliness in the workplace is more than just a personal issue—it’s a significant factor influencing employee engagement and overall business performance.

According to Gallup’s recent State of the Global Workplace report, one in five employees globally feels lonely daily, with younger workers and those working remotely most affected. This loneliness is not just a passing discomfort; it has profound implications for both individual well-being and organizational productivity.

In 2023, global employee engagement plateaued, and overall employee well-being declined. Despite reaching or approaching all-time highs in previous years, these measures did not improve, indicating a concerning trend. The majority of the world’s employees continue to struggle, which directly impacts their work and home life.

Gallup estimates that low employee engagement costs the global economy $8.9 trillion, or 9% of global GDP. This lack of improvement in engagement, along with declining well-being, highlights the critical importance of addressing loneliness as a key factor that affects both employee satisfaction and business performance.

The Link Between Loneliness and Engagement

Studies show that social isolation and chronic loneliness have severe consequences for physical and mental well-being. Research from Harvard professor Lisa Berkman indicates that individuals lacking social and community ties have twice the risk of mortality as those with robust social connections. These findings hold true regardless of an individual’s health or socioeconomic status.

A recent survey also revealed an alarming trend, indicating that nearly half of workers aged 18-25 report feeling lonely and stressed at work. This finding highlights the pervasive impact of loneliness, especially among younger employees. 

The Cost of Disengagement

Gallup’s findings underscore this connection. Employees who feel isolated and disengaged are more likely to experience loneliness. This sense of disconnection can lead to lower motivation, job dissatisfaction, and higher stress levels. Gallup estimates that low employee engagement costs the global economy $8.9 trillion, or 9% of global GDP. 

The Benefits of High Engagement

Jim Harter, Gallup’s chief workplace scientist, underscores the importance of engagement in challenging economic times: “Employee engagement has become increasingly important as the globe has entered uncertain economic times. Our research has shown that engagement has a stronger effect on organizational performance during a tough economy.” Engaged employees are more satisfied and more productive, which can help mitigate the effects of economic uncertainty.

The results show that engaged employees not only perform better at work but also thrive personally.

  • 78% reduction in absenteeism
  • 21% decrease in turnover for high-turnover organizations and 51% decrease for low-turnover organizations
  • 28% decrease in shrinkage (theft)
  • 63% reduction in safety incidents
  • 18% increase in sales productivity
  • 23% increase in profitability
  • 70% increase in employee well-being

How Employers Can Combat Workplace Loneliness

Employee engagement is deeply tied to overall life satisfaction. While not all mental health challenges are work-related, the workplace has a significant impact on how people feel about their lives and well-being. To truly support employee mental health, it’s essential to create a work environment where individuals can thrive both personally and professionally, with engagement being a key factor.

The good news is that businesses can take active steps to combat loneliness and drive engagement. Engaged employees are far less likely to feel lonely. When employees find meaning in their work and feel connected to their teams, they’re more likely to be emotionally and socially fulfilled. In fact, engagement plays a critical role. 

So, what can employers do?

  • Foster Social Connections: Encourage team-building activities, social events, or informal check-ins that promote socialization and collaboration among employees, especially for remote and hybrid workers.
  • Design Inclusive Workspaces: Whether in the office or virtually, inclusive spaces where employees feel comfortable sharing ideas and engaging with one another can help reduce feelings of isolation.
  • Provide Manager Support: Managers play a pivotal role in engagement. Gallup finds that engaged managers drive engagement across teams, boosting both productivity and well-being. Companies should invest in training managers to provide regular, meaningful feedback and foster team cohesion.

Building an Engaged, Connected Workforce

Loneliness and disengagement are critical challenges that organizations cannot afford to overlook. With the right strategies, businesses can foster a culture of engagement that not only combats isolation but also enhances productivity and well-being. By prioritizing employee connections and engagement, organizations can unlock their workforce’s full potential, ensuring both personal and organizational success—even in uncertain economic times.

 

 

Ready to elevate your workforce’s health? Partner with NMS Health for your occupational health screenings and vaccinations. With NMS Health, you are not just identifying and preventing future illness; you’re investing in a safer, healthier future for your team. Get started today!

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