How the disengagement dilemma is hurting your business

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Employee disengagement is killing your bottom line. The issue of employee disengagement continues to negatively impact businesses across the country in more ways than simply having workers nod off in the boardroom or at their desks.
According to Gallup’s “State of the American Workplace” study, 70 percent of traditional full-time workers are disengaged or actively disengaged from their jobs. This presents a real problem for employers who are already struggling with the recruitment and retention of top expertise, and has, in fact, been shown to cost the U.S. economy somewhere between $450 and $550 billion annually in lost productivity.
You are probably asking yourself, why is this happening and what can I do about it? While the factors influencing employee disengagement are multiple, the solution to combat this problem is actually simple and will help you protect your bottom line.
The disengagement dilemma
Employees are overworked, burned out, underpaid and generally unsatisfied. These sentiments have always existed in the workforce to some extent, however the Great Recession in the mid-2000s played a leading role in the recent surge of worker dissatisfaction. While many businesses sought to cut costs through the consolidation of cost centers and departments, others stopped hiring altogether.
At the same time, full-time traditional W2 employees began to grow increasingly disengaged and dissatisfied with their jobs due to mounting economic pressures, increased competition among top performers, irregular schedules (furloughs, wage freezes, demand for coverage of unfilled positions), and imbalances between expectations and resources.
Increased pressure on job pressure did not single out the individual worker, but also influenced the expectations placed on leaders in managerial and executive roles as well. The workplace began to see a fracture in the employee-manager relationship and an erosion in the belief of senior leadership. These characteristics speak to one single concept, as outlined by a joint Carnegie-MSW Research report on employee engagement — visibility of purpose.
As an employee’s visibility into their individual purpose and the larger purpose of the organization is obscured, his or her engagement erodes. Whether through lack of engaging supervisors or a cognitive distance from purposes understood at an executive level, an ability to understand and internalize why a worker is there leads to a disinterest in delivering great results or even sticking around.
The new engaged workforce
There is one segment of the workforce that has overcome these disengagement trends. This is the highly autonomous, competent and engaged freelance and independent contractor workforce. They are proven to be more engaged, satisfied and committed to the success of the organizations for which they contract than their W2 counterparts — and luckily, it is also one of the fastest growing segments of the workforce.
Studies estimate that more than 40 percent of the U.S. workforce will be made up of freelancers and independent contractors by the year 2020, and other projections indicate that the number of Americans who will work in the on-demand economy will double in the same period. Engagement factors like autonomy, competence and relatedness are strongly evidenced in the freelance workforce and organizations not currently incorporating contingent workers into their workforce in some way should immediately look at doing so.
Not only can independent contractors address fluctuating levels of skilled output and hiring requirements in times of instability or during dry seasons, but they also solve the cost burden that is presented by the traditional (and disengaged) workforce.
Companies invest in and attain high employee engagement have been shown to achieve three times the operating margin than companies without, and engaged employees can contribute to a 240 percent improvement in business results.
Additionally, freelancers are overwhelmingly satisfied with their work and are committed to the success of their own business (and by extension, the businesses with which they complete work for) by a factor of nine to one. In short, the independent workforce is happy, engaged, and can directly impact an organization’s bottom line.

By tapping into the highly engaged independent workforce, organizations can not only ensure that the contractors with which they work are invested in their success, but that they truly have workers who are capable of protecting revenue regardless of the stage the economy is in.

Chris Nichols is on a global quest to change how work gets done. His extensive capital market and capital formation experiences include tenures as president/CEO of a group of specialized manufacturing/research/distribution companies.