On Belonging: The Cost

In the previous blog post, we learned of the personal cost of not belonging in the workplace. Here I will share the economic ramifications of not belonging for businesses. While we at The Honeycomb Works believe that the economic cost on businesses should not be the reason why companies take action we must accept that often DEI action is deprioritised as other company pressures/priorities emerge. Melissa Sabella, CEO of The Honeycomb Works, shared that “even the best-intentioned leaders will ask us questions like “but what about a culture of high performance or merit? Leaving aside the bias that lies underneath the assumption that diversity and inclusion means lowering standards, a positive culture protects your business/team for the long term providing a solid foundation on which to grow”. 

A culture of high performance can only be maintained with a culture of belonging. By not ensuring an inclusive culture in the workplace, companies are losing money - through bad performance, absenteeism and high turnover. 

Better Performance

Employees that feel alienated have a lower work performance. According to an experiment by the Harvard Business Review, if they do not feel that they are part of the team their desire to work harder for the benefit of the team is significantly less than those who do feel included. Employers seek to employ people that truly care about their work but they do not invest the same energy into making sure that these employees feel like they belong - so the cycle continues.

Employees that feel that they belong have lower rates of absenteeism than those that feel ostracised. They also have a “greater commitment to [the] quality” of their work. Feeling as though they belong increases their confidence and thus leads to better performance. If an employee's self-esteem is not negatively affected by feeling alienated they do not begin to doubt their abilities and their skills. TYP explains that “it’s no secret that inclusion drives engagement, engagement leads to greater productivity and creativity and therefore to more innovation, which in turn benefits the bottom line.”

Ultimately when employees belong at work, they are not preoccupied with the strained relationships they have with their colleagues instead, they can concentrate on their actual job.

Sick Days

“Average of £554 per employee”

In the first part of our blog series, I shared the psychological effects of not belonging in the workplace. These negative effects lead to employees taking time off due to stress, anxiety and depression. According to the HSE, “in 2018/19, stress, depression or anxiety were responsible for 44% of all cases of work-related ill health and 54% of all working days lost due to health issues in GB”. Of course, some workplaces do not even consider these reasons to be acceptable for time off so it can lead to skewed data on why employees are taking leave. This then can stop HR managers from identifying patterns so again it is important to create a culture in which employees’ mental health and well-being are prioritised.

According to a report by job site CV-Library, 35.2% of UK workers suffer from mental illness and 42.9% of this group agreed that work-related stress was a contributor. Now it is understood that there are other workplace stressors that can affect the mental wellbeing of employees but these stresses can be exacerbated if employees do not feel that they belong.

With sick days costing companies an average of £544 per employee over a period of 12 months, it is important that companies consider the detrimental impact of not having a culture of belonging can have on the business finances.

High turnover

“46.1% of employees have contemplated quitting”

There comes a point where code-switching, disassociation, and sick days are not enough. That point? Quitting.

According to a report by CV-Library, 46.1% of employees have contemplated quitting a job because it affected their mental health. Employees that do not feel as though they belong will sometimes quit as the conditions are too hard for them. According to the Harvard Business Review, there is a “50% drop in turnover risk” when there is a culture of belonging in the workplace. An employment survey by a Canadian university found that employees who felt “ostracized were significantly more likely to have quit”. 

When employees leave a business the cost of recruiting, onboarding, handover and training can cost a company 6 to 9 months of an employees salary according to the Society of Human Resource Management. This process also requires other employees to take time out of their usual tasks to train and support new employees.

An employee earning £27,721, which is just above the UK average of £25,780 could cost a business just under 50% of this salary to replace them.

But losing employees isn’t just about the money lost. Losing employees, their skills and potential contributions results in businesses losing out on innovation and new perspectives.

Companies must accept that not having an inclusive workplace where all their employees feel that they are valued and that they belong not only risk alienating their talented employees but also risk financial loss. No culture of belonging has an economic as well as a personal cost.

Even if none of this was the case, we hope that people would still fight for equity and belonging - that we wouldn't be ok with toxic workplaces and we would still care about inequality if it didn't impact on the bottom line - but we can also assure you that you are not risking your business. Not fixing this is the risk.
- Melissa Sabella (CEO - The Honeycomb Works)

To find out how to create an inclusive culture in your workplace click here to join our virtual event: How to be an Ally on November 17th.