Engage or Pay the Price: Disengagement Can Be Costly

Michael Gallagher, .

Turnover graphicOften what appears as engagement may in fact be hiding a lack of critical skills in another area. Recently, I was invited to be a coach in a company where a senior manager seemed to be making great progress. Upon looking deeper into his behaviour, it was discovered that his communication skills were lacking. He seemed to be good at giving direction, but because there was no follow through conversations, there was really little communication between the manager and his staff. The appearance of engagement hid the reality of disengagement from his employees.

The symptoms of disengagement are sometimes hard to diagnose. The following are three key indicators that staff are really not committed to a manger/supervisor and that the issue may clearly be a case of ineffective management.

High Turnover

If you observe a high turnover rate in one department as opposed to others, you may want to look at the manager’s performance. Why can’t they keep their people? Staff turnover has a tangible cost for an organization. It is estimated that between 75 and 200 per cent of an employee’s annual salary is the cost of finding a replacement employee. The higher the position, the higher the skill set required and therefore, the higher the cost of finding a suitable candidate. Turnovers are not only financially costly but can have an unsettling effect on the department or team. When a new manager is appointed, the time to assimilate to their new vision or operational style can be costly in terms of the emotional stability of the team.


When accidents happen on the job or safety violations appear to be high in a certain division, the temptation is to blame the staff for being careless or sloppy. Once again, compare these safety reports across divisions or departments and an aberrant rate in one unit may indicate ineffective management.

Customer Service

Perhaps the most telltale indicator of a concern with management lies in the area of customer service. Usually the saying that the customer is always right holds weight. If there is a pattern of loss of regular customers, it is important to speak with them and ask why they have taken their business elsewhere. Even if you don’t get them back as customers, their insights may give senior management insight as to why they were driven away. Price is usually not the main factor. Bad customer service is often the main reason for the loss of valued customers. This reflects on the ability of a manager to manage people and ensure that the customer or client is being well served.

When staff become disenchanted and move to another job; when customers take their business elsewhere; and, when the work environment is marred by too many safety infractions, these are signs that the issues may lie at the management level.

If you’d like to discuss employee engagement within your organization, please contact us for more information. 


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Michael Gallagher

Mike Gallagher, President of Michael Gallagher Advisory, has spent the past 20 years helping small business owners and managers develop and implement strategic business plans, achieve sustainable, targeted growth and solve the problems that keep them up at night.