HR.com's 2025 survey found that only 34% of employees are seen as highly productive and just 30% rate as highly engaged — meaning most small business workforces are running well below their potential. Identifying and developing those employees is one of the highest-leverage moves an Owatonna manager can make.
Your Influence on Engagement Is Bigger Than You Think
When someone seems checked out, the instinct is to put that on them — their attitude, their fit. That feels fair, but it misplaces the cause.
Gallup's workplace research finds that 70% of the variance in team engagement is determined solely by the manager. The employee running at 60% capacity hasn't given up — they've learned what level of effort gets noticed and adjusted accordingly.
In practice: What looks like a motivation problem is usually a management gap — the fix starts with the person in charge.
How to Recognize an Underutilized Employee
An underutilized employee is someone whose skills or ambition exceeds what their role demands. They complete their work and don't cause problems — which is why they're easy to overlook. Watch for:
Consistently finishing ahead of schedule with nothing more to absorb
Rarely volunteering for new projects or cross-department tasks
Stopped raising ideas or questions in meetings
A reliable performer whose engagement has quietly flattened
Seven Strategies to Activate Untapped Potential
These are concrete moves. Identify which you're actually doing:
[ ] Schedule regular one-on-one meetings to understand goals and frustrations
[ ] Ask directly about skills and interests outside their current role
[ ] Assign a stretch project that requires new problem-solving
[ ] Connect them with a mentor — inside your business or through the Owatonna Community Leadership Academy
[ ] Build incentives tied to measurable development, not just output
[ ] Offer a clear path to promotion with defined milestones
[ ] Give more responsibility: a project to own, a new hire to onboard, a process to improve
Bottom line: The one-on-one is the highest-leverage starting point — employees share in private what they won't raise in a group.
How This Looks Different by Business Type
The root challenge is universal, but the fix depends on how your business runs.
If you run a manufacturing operation: skilled workers are often confined to their station and never invited to problem-solve at the process level. Include floor staff in improvement reviews — they frequently spot what management misses.
If you operate a healthcare practice: credentialed staff like MAs and LPNs are often constrained by scheduling habit, not actual scope. Audit your EHR workflows to find where clinical capacity goes unused and restructure delegation accordingly.
If you run a retail or service business: high-potential seasonal and part-time workers get treated as interchangeable. Identify them early and offer a path to year-round hours or a supervisory role.
The approach differs by sector, but the principle holds: give people more room than their job description allows.
Recognition Beats Salary Alone More Often Than You'd Expect
If competing on wages against larger regional employers feels like a losing battle, you may be closer to the solution than you think.
Research cited by Achievers found that companies with strong recognition programs see 31% lower voluntary turnover, and 90% of employees say they are more likely to put in extra effort when their work gets noticed. Specific, consistent acknowledgment — a direct thank-you, a callout at a team meeting, a note in a review — consistently outperforms raises as a retention driver.
In practice: Recognition compounds over time — skip it and you'll pay for it in turnover.
Making Development Part of the Workflow
The SBA encourages small businesses to develop employees' skills beyond their current role — through on-the-job training, continuing education, and apprenticeships — as a core retention strategy.
When building training materials to teach employees new skills, saving them as PDFs keeps formatting consistent across devices. Adobe Acrobat Online is a web-based platform that lets you make changes to PDFs online, including converting, compressing, editing, rotating, and reordering pages — no desktop software required. For personalized guidance, the SBA's Small Business Development Centers offer free advising on personnel administration and management strategy for businesses throughout Steele County.
Where to Start
Underutilized employees are a signal that the work environment isn't meeting what someone has to offer. The Owatonna Area Chamber's Growth Breakfast Series and Community Leadership Academy give local employers the frameworks and peer connections to build a management culture that gets more from the team you already have.
Frequently Asked Questions
What's the difference between an underperforming and an underutilized employee?
An underperforming employee isn't meeting current expectations. An underutilized employee is meeting them and capable of significantly more — the fixes look completely different. Underperformance needs accountability and coaching; underutilization needs expanded opportunity.
Ask first: is this person falling short, or are the expectations themselves too limited?
How do I bring this up without making an employee feel like they're in trouble?
Frame the conversation around their goals, not your concerns — "I want to make sure you have room to grow here" lands differently than "I've noticed you seem disengaged." Routine one-on-ones normalize these conversations before they feel like a performance issue.
Make growth conversations a regular habit, not a special event.
What if I invest in development and the employee leaves?
Employees who receive development opportunities are more likely to stay, not less. Workers who feel stagnant are already looking — development is one of the clearest reasons to stay put.
Withhold development and many will leave anyway; invest in it and you shift the odds.
