Are Disengaged Employees Affecting Your Bottom Line?

The hidden costs of poor employee engagement are draining businesses. Gallup’s ‘State of the Global Workplace 2024’ report estimates that disengaged employees are costing North American businesses nearly $1.9 trillion in lost productivity, absenteeism, and turnover. In Canada, where talent shortages and hybrid work transitions remain a challenge, these engagement gaps pose a significant operational risk.  

Employee engagement isn't just a feel-good HR concept; it is a core driver of operational effectiveness and a cornerstone of organizational success. Companies who don’t focus on engagement may:  

• Lose Productivity: A 2024 study from Gallup quantifies that disengaged teams are 18% less productive and can cost organizations up to 23% in lower profitability. 

• Lose Talent: An ADP Canada study from 2025 linked low engagement to rising voluntary turnover, which disrupts operations and inflates recruiting costs – especially, in already skill-short Canadian sectors. 

• Lose Quality: Lower engagement rates correlate with 41% more quality defects and 64% more safety incidents, especially in high-risk sectors like manufacturing, healthcare, and construction.  

• Stall Growth: Disengaged teams are more likely to resist changed, stalling company efforts an undermining innovation.  

• Reduce Client Satisfaction: Engagement also directly affects client satisfaction, with disengaged employees showing lowered empathy, slower response times, and reduced problem-solving initiative; all of which damage brand loyalty and customer retention.  

• Hit Leadership Bottlenecks: Burned out and disengaged managers are less effective communicators and decision makers, reports McLean & Company in 2025. They found that people managers were 1.7x more likely than their teams to experience workplace stress, resulting in weakened team alignment and execution. 

• See Absenteeism Rise: Gallup research repeatedly links engagement to 81% higher absenteeism rates. And, when employees do show up, if they are disengaged they are less likely to perform to a high standard.  

All of these things have a direct impact on a company’s bottom line and their ability to operate effectively. Fortunately, there is a lot that can be done to increase engagement. Companies looking to drive success should:  

1. Get the Data: Start with engagement surveys or regular pulse checks. Companies that measure engagement are 3.8x more likely to improve it, according to Gallup. Data helps identify team-specific challenges and target solutions accordingly.  

2. Upskill Managers: McLean & Company and Gallup tell us that 70% of engagement variance is driven by managers. Investing in leadership development has a high ROI. Only 44% of managers in Canada receive structured leadership training - closing this gap is essential.  

3. Prioritize Mental Health: Stress and burnout are drivers of disengagement. Offering psychological safety programs, EAPs, and realistic workload planning has been shown to reduce burnout by up to 60%, according to ADP Canada.  

4. Set Up Systems for Success: Frictionless tools and flexible systems help employees feel empowered. McLean & Company reports that employees who feel they have the tools to do their jobs well are 2.4x more likely to be engaged. 

5. Recognize and Reward Consistently: Recognition is one of the top three engagement drivers. Gallup finds that employees who receive weekly recognition are 5x more likely to be engaged than those who don’t. Recognition doesn’t have to be expensive, but it must be genuine and frequent. 

At MoveHR, we help businesses turn people challenges into performance opportunities. Whether it’s building engagement strategies, running pulse surveys, helping with performance review, or upskilling your leadership team - we’re here to help you build a culture that fuels your success.  

Let's move your people – and your business – forward. Get in touch today.  

References 

• Gallup. (2024). State of the Global Workplace Report. Gallup, Inc. 
  Key findings include engagement’s link to productivity, absenteeism, profitability, and the $1.9 trillion cost to North American businesses. 

• ADP Canada. (2025). People at Work 2025: A Global Workforce View. 
  Data sourced on Canadian employee sentiment, engagement trends, and burnout impacts. 

• McLean & Company. (2025). HR Trends Report: The State of People Management in Canada. 
  Provides insight into leadership bottlenecks, stress levels in managers, and the operational impact of disengaged leadership. 

• Gallup. (2024). Managers and Engagement: Why Leadership Still Drives Teams. Gallup, Inc. 
  Includes data on the 70% influence managers have on engagement and the importance of leadership development.