Pille Parind-Nisula writes in the recent Fontes publication that “Quiet quitters” and mediocre performers have a more significant impact on the team’s performance than the introduction of new technology. The world economy is losing billions due to low-engaged employees, a fact underscored by numerous studies. At the team level, a single disengaged team member can slash the overall team performance by a staggering 40%. What can be done to stem this tide and improve the team’s performance?
Despite having advanced digital public services and a growing share of the technology sector in GDP, Estonia still needs to catch up to the European average when it comes to productivity. In 2022, the productivity per employee in Estonia was only 81% of the average of EU member states.
While digitization and automation are often seen as the panacea for productivity issues, the role of leadership quality should not be underestimated. In fact, it is equally vital in propelling organizations towards the European average. Furthermore, global opinion leaders have championed the integration of empathy into management, heralding it as the catalyst for a new wave of productivity growth. This underscores the pivotal role of leadership in team performance. What does this mean for your organization?
Consider the team as a symphony orchestra. Simply replacing all the instruments with top-of-the-line Stradivarius and Steinway musical instruments won’t automatically result in a stellar performance. The conductor’s leadership and inspiration are crucial in creating a harmonious team. However, even with a brilliant conductor, if some musicians aren’t fully committed, the result won’t be a masterpiece. This analogy vividly illustrates the impact of disengaged team members on overall team performance.
Keeping an “indifferent distractor” on your team comes at a high price.
Several studies have analyzed the impact of unmotivated employees on the entire team. The results demonstrate that ignoring this issue can cause significant damage to an organization. This includes increased labor turnover and lowered employee morale. Moreover, it has been pointed out that not considering the negative impact can lead to lower team satisfaction and decreased productivity. Various studies have estimated that lost income falls 20-30%.
A study conducted by Yale University researchers focused on motivation and teamwork dynamics among students. The results showed that team members were more motivated when they felt valued and included. Feedback and recognition increased participants’ commitment and productivity. The researchers estimated that a non-committed team member significantly impacts the entire team’s performance, resulting in a 40% weaker outcome than in teams where all students were committed and motivated.
We must acknowledge that negativity spreads faster than positivity, and neglecting carelessness sets a negative standard that affects team dynamics, morale, and results.
Lost revenues
Ignoring the problem is costly for the employer. According to Gallup, 59% of workers worldwide identified themselves as silent leavers in 2023, meaning they fully or partially agreed with the statement that their contribution to the workplace was minimal. In addition, 18% of employees are vocal counter-employees, in which ignoring the problem is associated with direct risks.
“Gallup calculated that disengaged employees cost the world economy $8.8 trillion in 2023, equivalent to 9% of the global GDP.”
According to a survey, employee involvement in European countries was rated the lowest among all continents. Despite having better-than-average results in all studied categories across European countries, only 25% of employees in Estonia feel involved and motivated. This means that only one in four Estonian employees feel motivated and successful.
According to a recent mental health survey conducted by the Health Development Institute, 40% of Estonians believe that their work environment is detrimental to their mental health. This finding suggests that the issues we face and the economic losses we incur may be more severe than the global GDP yield loss of 9%.
We asked Aidan, an AI-powered leadership mentor from Moticheck’s monitoring software, to estimate the potential revenue loss for an employer. To illustrate the issue, we imagined a team of 10 members, where one team member lacked motivation and did not perform their best. Assuming an average monthly salary of 2,500 euros for the team, Aidan calculated that the team would miss out on 78,000 euros worth of income per year due to the uneven involvement of team members.
Manager as a career coach and creator of meaning at work
Many have probably heard of Netflix’s practice of annually reviewing which employees continue to deserve a place with the company. In our limited labor market, such an approach would be difficult, if not impossible. In the book “No Rules Rules,” Netflix CEO Reed Hastings and INSEAD professor Erin Meyer describe a talent-dense organization where each manager conducts an annual audit of all of his team members, asking himself: “How would I react if this team member wanted to leave the company?” The Estonian version of such a “leaver test” could be, for example: “What would motivate this employee to give his best?” If there is no answer in the manager’s mind, or if the necessary conditions are not present in the given company, it is still time to let the employee go.
To help employees find meaning in their work, a manager can make sense of the connection between daily tasks and the company’s larger purpose. His role is to explain how each employee’s contribution helps the company achieve its goals and recognize their work so far, encouraging team members to seek opportunities for personal development and growth both within and outside their current roles. Everything mentioned so far assumes that the leader cares and wants to help bring out the best in everyone. Being accountable for results caring should be a natural part of a manager’s job.
If the leader himself happens to be a quiet quitter, he is physically present but emotionally and spiritually gone. His lack of involvement and motivation will most likely spread among the team members. It can decrease the team’s previous productivity, further causing dissatisfaction and even resignation. It’s essential to remember that every manager has a superior who should take action upon noticing such a situation.
What brings efficiency – technology or people?
How can you be more efficient as a company or team? Suppose a company wants to increase productivity by 10% through automation or digitalization. The necessary investment depends on many factors, including the technology available, employee training, and system upgrades. Similarly, the costs associated with improving management quality will vary depending on existing management practices and the type of training or mentoring planned. Investments are not only financial; they also involve time and energy. If you want to increase the satisfaction and engagement of your employees, as a manager, you need to invest time in listening, understanding, and developing them. It requires dedication and patience, but in the end, it can produce results of greater weight than any technological innovation.
Both technological and human development aspects are essential, but promoting quality management and growing employee commitment gives faster and more permanent results. Technological innovations can increase productivity but may only work effectively with inclusive management. However, the necessary investment in technology can be tens or even hundreds of times more expensive.
Today’s overlooking may cost times more tomorrow.
Leaders must recognize mediocre performance and employee indifference if they want to excel and aim for growth to compensate for difficult economic conditions. Based on Gallup’s 2023 survey, half of our workforce will be looking around the market for a new job. Whether the reason for this is a toxic work culture, the hope of a higher salary, flexible work organization, or a lost sense of development – managers can always react to the situation. Hearing, advising, supporting, and training a team member today is cheaper than waiting for a situation with no more solutions other than replacing the same employee. As a rule, one employee’s annual training and development budget is more than ten times smaller than the costs of recruiting a new employee.
Caring and empathy are part of the modern effective leader’s toolbox for a reason. In addition to creating a supportive work culture and promoting team well-being, they also help improve results. Reengaging disengaged employees through coaching and development is a highway to improving productivity, according to a summary of Gallup’s 2023 Labor Market Analysis. Talk to the staff, they expect it.
Pille Parind-Nisula, April 2024
