Quiet Quitting: Why It's Hurting Your Business More Than You Think

Author: Nadeen Sivic, a seasoned technology team leader for over 20 years, writes about people-centric topics that impact

companies in the post-pandemic climate and helps companies make positive impacts on their key performance measures.

Quiet Quitting

When Ben first started his job, he was over the moon. He couldn't believe his luck—landing his first position out of college at such a well-established and well-known company. The first two years were amazing. However, everything changed when the company announced a reorganisation. His team was split in half and merged with other groups, making the adjustment difficult. The new team had a different way of doing things and clearly viewed Ben and his colleagues as incompetent. To make matters worse, the team leader struggled with managing the expanded group and didn’t seem to know how to bring the team together.

As a result, Ben began to withdraw and became noticeably less enthusiastic. His first annual performance review reflected a significant drop in his attitude, attendance, and quality of work. Once a top performer, he was now rated a solid 3—average. Whereas before, he had always been eager to volunteer for new projects and often arrived early to work, he now simply clocked in on time, left precisely at 5, and stopped volunteering altogether.

Disheartened and disengaged, Ben began doing only the bare minimum required by his employment contract. In essence, he had quietly quit his job. While an average performance review kept him employed and off the HR action plan radar, it did nothing to improve his chances of promotion.

Unfortunately for Ben, his story is not uncommon. In the years following the 2019 pandemic, attitudes toward work underwent a dramatic transformation. This shift began with the Great Resignation and has now evolved into the trend of "quiet quitting," driven by a depressed job market.

The term "quiet quitting" has emerged as a significant trend in the 2024 workplace, reflecting a shift in employee behaviour that is quietly but steadily impacting businesses worldwide. Unlike the dramatic act of resignation, quiet quitting is more subtle; it often goes unnoticed or its impact is underestimated until the effects become too costly to ignore.

Quiet quitting doesn’t involve employees physically leaving their jobs. Instead, it's about employees mentally checking out, doing the bare minimum required to keep their positions without any engagement or enthusiasm. They might clock in and out on time, complete tasks, and avoid confrontations, but they don’t go above and beyond or take initiative. This behaviour can stem from various factors, including burnout, disengagement, dissatisfaction, or a lack of career growth opportunities.

The Rising Concern of Quiet Quitting

As remote work blurred the lines between personal and professional life, many employees felt the need to reassess their work-life balance. Additionally, an increasing awareness of mental health and work-related stress, is leading more workers to prioritise personal well-being over professional ambition.

But it isn't just observational, the statistics are concerning.

Gallup’s State of the Global Workplace report indicates that only 15% of employees are engaged at work, while the rest are either disengaged or actively disengaged, a fertile ground for quiet quitting. This trend is particularly concerning as it represents a large portion of the workforce that is present in body but absent in spirit.

McKinsey & Co recently reported that in a sample of nearly 10,000 employees surveyed over three years, 26% said they would like to move at the beginning of the survey. When resurveyed it was discovered that 19% of this number still remained in the same employment, and represented a risk for dissatisfaction. In addition to this, they have combined data from Understanding Society sources, which shows that 20% to 40% of a company's workforce could be made up of quiet quitters.

This is a significant proportion of human capital that is not being fully utilised. Research suggests that such employees take more sick days, put in less discretionary effort, are less focused on delivering outputs, and may even make customers4  and co-workers unhappy. Therefore, quiet quitting has material consequences for organisational performance.

From an article in McKinsey Blog titled: The Hidden Cost of Quiet Quitting, Quantified.

So What Does it Cost?

While quiet quitting might seem less disruptive than actual turnover, the costs associated with it can be substantial and are often more insidious. Here’s how:

Decreased Productivity: Quiet quitters contribute to a decline in overall productivity. When employees do the bare minimum, it affects the team's output, leading to missed deadlines, lower quality of work, and reduced efficiency. Over time, this can erode the company’s competitive edge.

Lower Employee Morale: Quiet quitting can be contagious. When a significant portion of the workforce disengages, it can create a negative atmosphere, dragging down the morale of others who might otherwise be motivated and engaged. This ripple effect can lead to a broader disengagement across teams and departments.

Increased Turnover: Quiet quitting can eventually lead to actual quitting, but how long this takes is unknown. Disengaged employees who have mentally checked out are more likely to leave when a better opportunity arises. High turnover rates come with their own set of costs, including recruitment, training, and lost productivity during the transition.

Customer Satisfaction: Employees who are disengaged are less likely to provide excellent customer service, innovate, or take ownership of their work. This can result in lower customer satisfaction, which directly impacts the bottom line, especially in service-oriented industries.

Hidden Financial Costs: Quantifying the exact cost of quiet quitting can be challenging because it doesn’t show up directly on financial statements. However, experts estimate that disengaged employees can cost companies the equivalent of up to 34% of their annual salary in lost productivity. For a company with thousands of employees, this can translate to millions in lost revenue each year.

Addressing the Issue: What Can Companies Do?

Addressing this new trend may seem overwhelming, but when handled the right way, the risks and impacts can be reduced. Since every company is a unique blend of variables, including its people, a deep analysis is required to uncover how widespread the issue is and to identify its root causes. Here are some steps that can be taken:

Accept (some of) the Reality: You can't please all the people all the time. As a first step, it’s important to acknowledge that a percentage of employees will probably always fit the description of quiet quitters. As humans change their ideas and their desires, the quitting is a dynamic, human-centric metric that must be accepted as part of the workplace landscape. Why? simply because some employees are not equipped with high performing skills that help them proactively manage their careers.

Data-Driven Insights: Observation is good, but data is better. The key metric to watch is changes in performance reviews. Analysing HR records over the past few years can help identify downward trends where individuals are consistently regressing in performance without rebounding.

Targeted Employee Surveys: If you suspect a high level of quiet quitting, conduct more frequent and targeted surveys to gain a deeper understanding of the issue. This will help identify not just the volume of disengaged employees, but also pinpoint areas of dissatisfaction.

Annual Improvement Initiatives: If you haven’t already, ensure that you build annual initiatives for improvement based on survey outcomes. Even the act of demonstrating to employees that you’re willing to address the issues causing disengagement can go a long way in boosting morale. Just be sure to follow through on these commitments.

If you'd like a quick, simple and free survey to determine how happy your employees are at work, DM me, Nadeen Sivic, via Linkedin

Conclusion: The Silent Profit Drain

In closing, while quiet quitting may be a silent trend, its impact on businesses is loud and clear. Companies that fail to address this growing issue risk not only a decline in productivity but also a significant financial loss. By recognising the signs of quiet quitting and taking proactive steps to engage employees, companies can mitigate these costs and foster a more committed, motivated workforce.

The next time you review your company’s performance metrics, consider not just who’s physically present but who’s truly engaged—and how much it might be costing you if they’re not.

Author: Nadeen Sivic

Date: 19 August 2024

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