One in five people in the wrong job and their low engagement levels are costing ASX100 companies up to $6 billion in annual revenue, according to a research report from Right Management.
The research took in a total of 857 outplacement/redundancy candidates that had completed Right Management’s career management program in the past five years, and compared their engagement levels from their pre-transition job to their current job.
Career transition gives people the opportunity to take stock, re-assess and progress their career in a direction they desire, according to the research, which found that an individual’s engagement level increased an average of 15.4 per cent from their pre-transition role to their current role.
It also found that one in five people changed job function or industry out of a personal desire, rather than necessity. On average, these people had approximately a 20 unit increase above the baseline 15 per cent increase in their engagement levels.
Ian Till, principal consultant at Right Management, said that this demonstrates that given the right opportunity and market conditions, at least one in five people would choose to change either industry or job function.
“Career transition provides the opportunity for individuals to analyse their current professional position and re-evaluate their goals and aspirations,” said Till.
“The implication of this research is that approximately one in five people are in the wrong job which can have a significant impact on their engagement with their role, their peers and their organisation.”
Candidates who had changed function or industry out of necessity saw basically no change in their engagement scores relative to their pre-transition engagement scores.
This is in stark contrast to those people that changed because they wanted to, and the report said this implies that people who take up a job ‘just to pay the bills’ are significantly less engaged in their new roles and may be destroying organisational value.
Hefty financial implications
Research into the Employee Customer Profit Chain, published in the Harvard Business Review, has found that the impact of increasing engagement scores by five units has been shown to lead to a 1.3 per cent increase in customer satisfaction and a 0.5 per cent increase in revenue growth.
Based on this and the above Right Management research, the financial impact of intrinsically motivated and engaged individuals can equate to a 9.3 per cent increase in customer satisfaction and a 3.6 per cent increase in annual revenue growth
By moving the 20 per cent of employees currently in a wrong role to a position they want to be in, the research found organisations can increase annual revenue by 0.7 per cent (based on 3.6 per cent increase in annual organisational revenue divided by 5 = 0.7 per cent). This would equate to an additional $6 billion in revenue annually across the ASX100.
“The cost of low employee engagement levels is significant, resulting in lower customer satisfaction and lost revenue to the business. It’s also important to acknowledge that these calculations only consider direct costs and don’t take into account the indirect impact these individuals would have on their peers within the organisation,” Till said.
What business leaders can do
Organisations must focus on refining their career development practices to ensure they have the right talent in place to help them remain agile and responsive to change.
Further, recruiters must look more closely at motivational factors, in addition to technical expertise when shortlisting candidates for job roles.
“The unfortunate reality for many organisations and individuals is that many people are socialised into functional silos or job roles for the wrong reasons,” said Till.
“Therefore it’s crucial that organisations conduct robust and structured career discussions with employees to improve their self-awareness around their interests and capabilities, empower them to move into roles more aligned to their interests and capabilities, and thereby improve their level of engagement overall.
“While recruiters generally give preference to candidates that have prior technical or industry experience for a new role – especially in the current economic climate – it’s crucial they also consider underlying motivational fit.
“Hiring the person who ‘can’ do the job, but doesn’t really want to, is worse than hiring the person who may not ‘tick all the boxes’ but has the passion and willingness to learn,” Till said.
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