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Employee Engagement Matters – Even Beyond the Last Day

By Melissa J. Anderson

Employee engagement numbers for the past few years have been grim – and with companies cutting budgets, staff, and resources, and demanding more productivity with less, it comes as no surprise that workers are unhappy. Overworked and underpaid, employees are grumbling – and the research is showing it.

We’ve heard that engaged employees are happier, more productive, and more likely to stay within an organization. But a new study has revealed the importance of keeping employees engaged – even when they’re ready to leave the company.

Why? According to research by the Corporate Executive Board Co., disgruntled ex-employees are more likely than ever to spread negative information about their former company.

In an age where communication happens at the click of a button, gossip about a company’s internal practices and employee treatment can spread rapidly. That’s one reason that companies should be careful to keep employees happy to the very last minute. But here’s another: the CEB’s research shows that the most unhappy employees are also the ones who the most expensive to replace.

Unhappy ex-employees can really cost a company – not just in reputation, but in dollars as well.

Growing Discontent

According to the Wall Street Journal, the Corporate Executive Board Co. aggregated the results of over 4,300 exit interviews at 80 companies. And more than three quarters of people leaving their jobs say they wouldn’t recommend their company to other employees.

That’s increased from 42% – less than half – in 2008. The WSJ’s Joe Light points out that that number was measured just at the beginning of the recession, and it’s likely increased (almost doubled) due to negative treatment during the economic crisis that’s followed.

Brian Kropp, a managing director with the CEB, explained, “Companies were blunt and rough and tumble with their work force. They created a sense that ‘the company doesn’t care about me.’”

Because unemployment numbers were high and times were tough, companies were less concerned with stemming turnover. Time’s Brad Tuttle explained:

“It’s no coincidence that that’s basically when the economy tanked, unemployment skyrocketed, and businesses not only hunkered down into survival mode but figured out that they could treat their employees poorly without consequence—because odds were high employees couldn’t find better (or any other) places to work. Instead of the ‘job hopping’ they’d gotten accustomed to, workers still lucky enough to be receiving paychecks transformed into ‘career monogamists,’ burrowing in and hanging onto their jobs however they could, no matter the conditions.”

Unemployment is still high – but another recent report by the CEB has revealed a reason for employers to be concerned about the willingness of ex-employees to malign them.

High Performers Ready to Move On

According to a new report released by the CEB this summer, some employees may be ready to move on despite the challenges presented by the harsh economic situation.

The study says that high performers are among the most disgruntled, with a quarter looking to change jobs in the next year – a percentage that has risen from only ten percent in 2008. Bnet’s Kimberly Weisul asked, “With unemployment high, how hard should companies try to retain people-even their best people?”

The answer, according to the research, is the cost of finding replacements. The CEB study says that the cost of losing a high potential employee can be three and a half times that employee’s salary. That includes the cost of attracting new talent as well as the cost of damaged business relationships and other contributions.

High performers, says George Penn, senior director of the Corporate Leadership Council at the CEB told Talent Management Magazine that high performers have faced more upheaval through the recession that may be impacting their level of engagement.

And he added, high performers are harder to replace – representing only six to nine percent of the total employee population. “Statistically speaking, you have a lower chance and that’s why it’s even more important to retain these individuals.”

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