2021 has continued to bring about a number of challenges to employers. Although employee engagement reached the highest it has ever reached at the beginning of 2021 (according to Gallup), employers have struggled to maintain optimal workforce numbers. “Hiring” and “Help Wanted” signs dot the landscape.
CNBC reports that there are roughly 1 million more job openings than employees looking for jobs. Employers are throwing signing bonuses, pet insurance, discount programs, and many other new benefits at employees in an effort to retain and recruit new employees.
Before the current job market required even more extreme benefits to entice prospective employees, the cost of turnover sat at roughly 20% of an employee’s annual salary (source). Now, that percentage is rising.
The cost of employees is rising, but what can employers do to maintain ROI on employee expenses? This article will look at the causes for employee cost rising and what employers can do to increase the productivity and longevity of employees for a greater return on employee expense.
Wasted Employee Time Costs
Employees waste a lot of time individually and collectively. Depending on the survey, employees waste anywhere between 8 hours a week and 4 hours a day. For many employers, this is a discouraging statistic. In addition to the rising costs of retaining and attracting employees, a substantial amount of the largest employee cost, annual salary, is wasted.
It’s wasted on personal tasks, distraction, chatting, personal grooming, browsing the internet, and a myriad of other time-wasters. Some of it’s wasted in meetings, where employees feel that attending means since they are attending, they are free to text or hang out on social media.
Some managers respond to these statistics by seeking to squeeze wasted time out of employees in the form of control. Perhaps if employees are required to report time more accurately, check-in more frequently, or be held more accountable, they won’t waste time.
But, the illusion of manager control is exactly that: an illusion. In fact, employees are even more likely to waste time when they feel more controlled. That’s because control is one of the most fundamental aspects of employee engagement. And, employee engagement is one of the greatest indicators of performance and time well-spent while on the clock.
6 Top Reasons Employees Waste Time (And Their Employer’s Money)
When employees are asked why they waste time, surprisingly, many of the reasons named also correlate to the very benefits millennials are demanding of employees. And, sadly, it doesn’t always correspond to the types of benefits that employers are offering. A recent survey by Salary.com highlighted the six top reasons employees waste time. Salary, it’s at the bottom of the list.
Using these two measuring sticks, let’s dive into actionable steps employers can do to increase employee performance while also attracting and retaining more employees.
Employees Want Greater Challenges
The number one reason employees waste time is because they need more challenging tasks. 35% of employees said they waste time because they aren’t challenged enough. In addition, another 23% of employees waste time because they are bored from monotony.
In other words, employees need growth to be engaged at work. When employees are growing, learning, and facing challenges at work, they are happier. Job growth is important to 87% of Millennials, who stated that job growth was one of their top priorities (Gallup).
Job growth can, of course, include promotions, advancements, and career changes. But, it also includes learning opportunities, challenging tasks, and mentoring. Mentoring is another benefit that Millennials seek in their career path. (Check out 8 Reasons Your Business Needs A Mentoring Program.)
Lunch and Learns can be used for additional training, optional classes, clubs, and other activities that provide employees time to grow, learn, gain new skills, and advance within their current job. Check out how you can use lunch and learns to reduce turnover.
Of course, allowing employees to take on tasks or challenges also means allowing them to sometimes fail. If employees don’t have a chance at failure, the task isn’t challenging. Millennials cite the chance to fail is something they look for in employers. In fact, recognition becomes more valuable and builds greater loyalty and engagement when failure is traversed correctly by managers.
Employees Work Too Many Hours And Whittle Away Time
34% of employees state that they waste time at work because they work too many hours. And, the definition of too many hours differs by person. This explains in part, why many employees spend time on personal tasks. Phone calls, texts, and personal errands account for a large share of wasted time.
Employees often find that personal business needs to be handled during working hours. As a result, paid time is spent on those tasks. But, employees who work remotely waste fewer hours on personal tasks. That’s probably because remote employees gain over 105 hours (CNBC) and as much as 5 hours a week of free time for fully remote workers.
This provides employees time for personal errands and to explore hobbies, lowering overall stress. It provides for better work/life balance, which is reflected in employee productivity. Flexible schedule employees see some of the same benefits. When employees can come in or leave early or late, it provides them the flexibility to do many of these personal errands during hours they would otherwise be working (and probably still doing those tasks).
Flexible schedules combined with performance-based expectations allow employees to work during the times they need to work and to clock out during underperforming periods.
The option for remote work and flexible schedules is one of the highest forms of autonomy employers can give employees. And, autonomy is critical to employee satisfaction and experiencing flow. An O.C. Tanner report shows that in order for employees to gain flow, or peak experiences, autonomy is needed.
Inadequate Recognition For High Performance
Another reason employees waste time may surprise you: lack of recognition. 32% of employees said they wasted time at work because they didn’t see any incentive to work harder. 30% of employees waste time because they are unsatisfied. In other words, they are actively unengaged.
Surprisingly, the solution for this is not higher salaries, but better recognition. Recognition improves employee engagement and performance. It increases loyalty and longevity. Check out these three articles for greater understanding:
Peer Recognition: The Fuel For An Employee Engagement Explosion
3 Actions to Inspire Employees and Foster Motivation
Employee Feedback: Cultivate Motivation, Retention, Engagement
When managers recognize employees, engagement skyrockets. But, corrosion vía prizes to behave in certain ways is sometimes confused as recognition and always backfires. Check out Prizes, Awards, and Rewards: Differences in Employee Motivation to understand how to recognize correctly and in a way that increases engagement, rather than destroys it.
Peer recognition is essential to building engagement and community at work. Millennials cite community as a major factor when deciding on whether or not to stay at an employer and when choosing a new employer. Peer recognition is arguably one of the largest factors of the community.
Recognition doesn’t have to be expensive or costly. In fact, you can recognize for free or almost nothing, (60 ideas) and have a much greater impact than increased salaries.
Underpaid Employees Waste Time
At the very bottom of the reasons employees waste time, is the reason that employees feel underpaid. 18% of employees cite being underpaid as the reason they waste time. This shows two key factors.
First, while employers often seek to motivate employees through increased salary and bonuses, money is rarely a great motivator. See Money Isn’t The Key To Employee Motivation, But What is?. Throwing money at employees is one of the least effective changes employers can do to inspire employee engagement and happiness levels.
Second, if employees are underpaid for industry standards, it is important to offer competitive salaries. Employees will create fairness, even if that means wasting time at work to balance out lower salaries. For employees that are underpaid, the very sense of unfairness is often a greater reason for job changes than the actual pay itself. The perception of being underpaid is powerful.
Counter this with transparent and fair salary policies. Make sure that certain genders or ethnic groups aren’t paid different wages as a whole. Culturally white men are more comfortable asking for raises, which means that wage discrepancies can occur without intentional bias.
Focus on recognition and encourage peer recognition. Peer recognition provides for healthier and more consistent recognition. Check out 10 Reasons Peer Recognition Drives Employment Satisfaction.
Conclusion
By focusing on the cultural and environmental needs of employees, employers can retain and attract more employees. Instead of greater salaries, employees are demanding greater autonomy, increased connection, and personal growth. Exactly the three things outlined in the O.C. Tanner Culture Report.
About Thanks
Thanks is a leading provider of a recognition-based platform that increases communication, builds teamwork, and makes recognition a part of company culture. Fast, easy and simple Thanks makes it easy to bring data-driven employee recognition to your entire organization. O.C. Tanner purchased the Thanks platform in 2019 to fulfill the recognition needs of smaller businesses.
Thanks customers benefit from the same decades of research in employee motivation and company culture that O.C. Tanner enterprise clients enjoy, but in a product that is geared for fast, easy and simple deployment. Whether you’re starting a recognition program or improving and expanding on what you already have, Thanks has everything you need to engage your people with effective, scalable recognition.