Workplace Trends A Wake-Up Call To Leaders

29% of employees open to looking elsewhere

Employees are feeling increasing stress in the workplace that, if left unchecked, could impact business performance, according to Towers Perrin’s Workplace Watch, a newly launched quarterly look at employee opinions across global organizations. Based on opinions of more than 650,000 employees, Towers Perrin found that only 55% of workers agree they can balance work and personal responsibilities, down from 62% just one quarter earlier. On the other hand, employee engagement, a key indicator of organizational performance, has held steady through the first quarter of this year.

Contributing to this outcome is that employees are actually clearer about their job responsibilities and have more confidence in their long-term career opportunities now than a year ago.

But the data also confirm a drop in employees’ understanding of their company’s goals and long-term direction, as well as in their perceptions of leadership’s overall effectiveness.

The inaugural Workplace Watch compares updated data for the first quarter of 2009 with the five preceding quarters to evaluate how the economic downturn is affecting employees’ attitudes about work and levels of engagement.

During the first quarter of 2009, favourable scores rose slightly on a range of items relating to organizational efficiency, communication, company reputation and front-line supervisors, all of which contribute to positive engagement. Almost 74% of employees agree their company’s structure facilitates efficient operations, up from 66% in the last quarter of 2008 and 58% in the first quarter of 2008. This suggests the latest rounds of restructuring have been done thoughtfully and in a manner that doesn’t automatically demand doing more with less. At the same time, 91% understand how their work helps the company achieve its immediate objectives. More than two-thirds (68%) feel their company offers long-term career opportunities for them, up from 60% at the beginning of 2008. And 77% agree their company is highly regarded by customers, up from prior years as well, suggesting employees recognize the efforts their companies are making to connect with the marketplace in this tough economy.

“These results show that many employees ‘get it’ in terms of what the company has to do in the short term to weather the economic downturn,” says Dan McCauley, Principal, Towers Perrin. “They understand that the recession has required sacrifices, and they’re willing to do what’s needed to help their employer succeed—in part because they want to ensure their own continued employment. The fact that companies don’t yet face a growing gap in engagement is welcome news, particularly given the strong relationship between high engagement and high performance.

“That said, even the existing gap remains troubling since an ‘all hands on deck’ mindset is essential right now,” McCauley continued. “Complacency about current engagement levels opens a company to significant risk that it will fall behind competitors, both in performance and talent retention, as the economy starts to rebound and it shifts to more of a growth mode.”

Not surprisingly, the data also confirm that fewer people are looking to change jobs right now. Seventy-one percent agree they’re not seriously considering leaving their current job, up from 64% in the last quarter of 2007.

While people are less inclined to switch jobs right now, it’s important to turn those statistics around and remember that 29% of employees are still open to moving elsewhere. If engagement doesn’t improve before the upturn begins and the job market opens up again, these individuals could be the first ones out the door. With almost one in three people contributing to “latent turnover”, this is another serious risk to rapid financial recovery and growth—especially if future attrition includes “A” players and people in critical strategic roles. Smart employers will want to get ahead of the upswing in the employment trend, so when it comes back fully, they’re not watching a revolving door of talent.

Engagement Warning Signs

In other critical areas linked to engagement and performance, a less positive picture also sounds some warning bells. Favourable views about leadership, the top driver of employee engagement, are down in some key areas. Most notably, the percentage of employees agreeing top management provides a clear sense of direction dropped significantly, to 63% from 71% in the fourth quarter of 2008. The percentage of employees agreeing that top management provides effective leadership also declined this quarter—to 50% from 56% at the end of 2008. In addition, only 69% of employees agree that they clearly understand their company’s broad goals, down a striking 10 percentage points from 79% in the fourth quarter of 2008.

These trends are disconcerting and represent a wake-up call for leaders. People need more from their senior leaders in terms of painting a clear picture of where the company is going and where they need to put their focus. While the results indicate that leaders have stepped up to the challenge of communicating more and being more visible during this period of crisis, the findings also suggest leaders could be losing sight of the long-term vision and purpose that remains essential in encouraging and energizing the workforce.

SOURCE: TOWERS PERRIN

Article published in Your Workplace magazine issue 11-5