The high cost of disengaged employees: Why culture matters more than ever

“When culture is misaligned, it’s the highly engaged employees who will jump ship, leaving organisations with a growing group of Detractors who can bring down morale, productivity, and engagement.” – Parvez Rahman, Asia HR Leader, Dayforce

What was once considered a “soft” element of business strategy has now become a defining force behind productivity, retention, and growth. As Dayforce’s 15th Annual Pulse of Talent report revealed, company culture is no longer just about perks or posters on the wall – it’s a strategic lever that can either propel an organisation forward or quietly erode its foundation.

Speaking with HRM Asia, Parvez Rahman, Asia HR Leader at Dayforce, explained, “Culture is often seen as a ‘fluffy’ issue, often seen as a less important facet of work, unlike efficiency and productivity. It’s likely because of the notion that culture is often more sensed than measured, and leaders are pressured to quantify the value of every dollar spent.”

“However, many leaders would also agree that employees are the lifeblood of organisations, and they need the right conditions to do their best work. While the effects of culture may not always be seen or traced from action to result, many studies show the effects of poor culture on the organisation’s bottom line.”

The report highlighted significant disparities in how different levels within an organisation perceive company culture. For instance, while 84% of executives and 81% of HR leaders believe their organisation is actively working to improve its culture, only 49% of employees share the same sentiment. This misalignment is evident in areas such as flexibility, access to technology, and a sense of belonging. These aspects of the lived experience need to align with the company’s stated norms, values, and beliefs regarding the employee experience.

“These gaps matter and making the wrong culture investments may not just mean wasting money in a time of slashed or stagnant budgets, but also impacting the organisation’s bottom line,” Rahman emphasised. “On the other hand, our data shows that improving culture can have positive effects, such as helping employees feel more engaged, experience improved mental health and be more motivated to work harder.”

Meet the Promoters – and the Detractors

To better understand the nuances of workplace cultures, Dayforce developed a Workplace Culture Index based on the likelihood of employees recommending their company’s culture. Respondents were categorised as Culture Promoters, Passives, or Detractors.

Culture Promoters are engaged, optimistic, and in sync with leadership. They are 3.3 times more likely to stay for growth opportunities and 5.2 times more likely to feel comfortable sharing their opinions at work. “Organisations need to recruit and foster more of these people to find the optimal balance between productivity and employee expectations,” said Rahman.

Culture Detractors, meanwhile, feel disconnected and disillusioned – 10 times less likely to say they are proud of where they work and 3.3 times less likely to feel trusted by their employer. Furthermore, only 28% of Culture Detractors are actively job-hunting. As Rahman noted, “When business strategy and culture are misaligned, it’s the highly engaged employees who will jump ship, leaving organisations with a growing group of Detractors who can bring down morale, productivity, and engagement.”

The report also showed that career growth is a powerful retention lever, particularly in the Asia-Pacific region. Culture Promoters in South-East Asia are 33% more likely to have had learning opportunities in the past year. They are also more likely to access self-paced online learning, use AI-powered career recommendations, and have a defined learning plan.

“Persistent labour shortages and workplace changes have made learning and development essential,” Rahman stated. “But with so many options to deliver learning, it’s hard to know what employers should invest in. Fortunately, the Culture Promoters can help steer employers to the right path.”

And while AI and new technologies have the potential to strengthen culture, the report revealed stark disparities in perception and access. Executives are 41% more likely than employees to say AI will have a positive culture impact – and 48% more likely to feel confident in its use.

Rahman continued, “This shows a vast divide in cultural experiences about technology across the ranks, and communication is critical to ensuring that tech investments are used across the organisation. Providing access, communicating technology investments, and more education in using new tech such as AI could help increase the likelihood that employees will be more familiar and comfortable with them, and therefore help align the business’ aspirations with the employee experience, which helps build a stronger culture.”

A culture playbook that works

So, what can HR leaders do to bridge these gaps? The Pulse of Talent report outlined five key areas where organisations can make smart investments to align the employee experience with culture aspirations and drive business performance:

1. Learning – Provide employees with access to online and self-paced learning opportunities to support their development.
2. Development – Offer clear career paths and utilise AI-powered tools to provide employees with personalised career growth recommendations.
3. Communication – Enhance communication by ensuring employees are well-informed through a centralised information hub, promoting transparency and trust.
4. Onboarding – Enhance the employee experience from the start with effective recruiting and onboarding processes, including self-guided onboarding activities.
5. Efficiency – Enhance employee efficiency by providing technology and tools, such as self-service HR platforms and mobile apps, to streamline routine tasks.

“It’s clear that organisations need to be intentional about their employee experiences to help prevent negative business outcomes,” Rahman concluded. “Based on our survey responses, there is no one-size-fits-all solution to the question of culture, but the results of our Workplace Culture Index show that investing in the right technology can help strengthen organisational culture and create more Culture Promoters.”