Ignoring
Employee
Recognition?
It Could Be Costing You More Than You Think.
Learn How Lack of Employee Recognition Can Impoact Your Business
Employee recognition isn't just a feel-good practice — it's a vital component of a thriving business.
When appreciation is lacking, it leads to tangible negative effects such as decreased engagement, higher turnover rates, and reduced productivity. This not only harms employee morale but also significantly impacts the bottom line.
Explore how neglecting recognition can cost your company more than you might realize.
Decreased Employee Engagement
Lack of recognition contributes to both low motivation and employee engagement.
Decreased Employee Engagement
Only 20% of employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.
Likewise, recent research from Gallup estimates that 16% of employees are actively disengaged and 51% are partially disengaged.
Increased Turnover Rates
High Cost of Employee Turnover
Decreased
Productivity
Lower
Profitability
Negative Impact
on Company
Culture
Health and
Well-being
Costs
Cost of
Absenteeism
Summary of
Financial
Implications
Increased Turnover Rates
Employees who don't feel adequately recognized are 2x more likely to quit within a year.
High Cost of Employee Turnover
The average cost of replacing an employee is between 50% to 200% of their annual salary.
Poor recognition leads to lower job satisfaction and higher turnover, increasing recruitment and training costs.
Turnover costs include hard expenses such as hiring and training, as well as soft costs like lost productivity and time spent onboarding new employees.
Lack of recognition leads to disengagement and reduced effort.
Poor recognition affects the company's financial performance.
Poor recognition leads to a toxic work environment, heightening employee’s stress and dissatisfaction.
Poor recognition affects mental and physical health, increasing healthcare costs and stress levels.
An unrecognized and disengaged workforce is more likely to be absent within the workforce, which will cost organizations significant money from lost days and productivity.
Lower Profitability
Organizations with low engagement scores
earn 32% less operating income.
Negative Impact on Company Culture
Poor recognition leads to a toxic work environment, heightening employee’s stress and dissatisfaction.
41% of disengaged employees express a
desire to improve their workplace culture,
particularly by increasing recognition.
Find out if your workplace is toxic with our Toxic Workplace Quiz.
Summary of Financial Implications
Turnover Costs: Recruiting, onboarding, and training new employees.
Productivity Losses: Due to disengaged employees and higher absenteeism.
Healthcare Costs: Increased due to stress and dissatisfaction.
The Cost of Absenteeism
Absenteeism costs an average of $2,650
per year for salaried employees and $3,600
per year for hourly employees.
This becomes costly for organizations, as disengaged workforces experience up to a 78% increase in absenteeism.
Health and Well-being Costs
Employees who feel undervalued are at a 50% higher risk of experiencing stress-related illnesses.
Decreased Productivity
Companies with poor recognition practices have 27% higher absenteeism. According to Gallup, engaged employees are 23% more profitable than disengaged employees, and Deloitte reports that effective recognition programs can increase engagement and boost productivity up to 14%.
Investing in effective employee recognition programs is not just a nice-to-have — it's a business imperative that can lead to increased engagement, productivity, and profitability.
Let us assess your current recognition practices and determine whether an employee recognition & engagement program is right for you!
Curious on how much time and money these 8 areas are costing you and your organization?
Check out our HR Calculator Hub.
Contact Inspirus