EMPLOYEE ENGAGEMENT
Businesses face talent exodus of disengaged employees as economy revives
As the economy improves, some UK organisations will face a talent exodus of disengaged employees, overstretched and under-rewarded in the recession, new research by Hay Group reveals.
Key survey results
65% of employees are currently working over and above contracted hours
36% have increased the amount of overtime they put in over the past 12 months.
The average amount of unpaid overtime workers are currently clocking up is six hours a week.
For now, this extra time is being put in willingly as workers pull together. The vast majority (85%) of those working unpaid overtime are committed to helping their organisation survive the recession.
Exactly half of these employees warn that this level of work is unsustainable.
Artificial engagement
Despite this apparent “Dunkirk spirit” among front-line workers, employee engagement levels stand significantly below normal levels - 59% against normative levels of 72%. As many as 36% of employees are “unhappy” in their current role. What’s more, three in ten (30%) rate their organisation as a worse place to work compared to 12 months ago.
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Russell Hobby, Associate Director at Hay Group, explained: “Walking around the office, leaders may feel the warm glow of a ‘Dunkirk spirit’ among teams battling through the recession together. However, managers should beware of superficial engagement, where levels of effort and staff retention are artificially inflated by redundancy fears and a soft employment market, rather than genuine loyalty to the firm.”
He added: “Those companies solely focused on the bottom line during the recession could easily fail to notice the debt they have built up with employees for their loyalty during tough times. They risk falling behind those few organisations that have bucked the trend and successfully kept engagement high.”
Brain drain
The Hay Group research shows that some workers are only staying with employers due to an uncertain jobs market, and warns of an "imminent talent exodus from organisations that fail to re-engage their employees before the economy revives". Indeed, as many as 41% say they are more likely to leave their employer with an improvement in the economic environment.
Hobby said: “If the 47% of employees planning to leave their jobs over the next two years carry out their intention, this would be a 16% increase in UK average employee turnover levels. With the average cost of replacing an employee said to be £6,125 this suggests that low employee engagement in the recession could cost the UK economy an additional £17.4 billion.” He added: “As the economy warms up, leaders will notice a trickle of talent draining from their organisations that could quickly turn into a torrent if they do not act now to re-establish trust, and provide a vision for the new business world.”
Broken deal
The study warns that some employers have broken their psychological contract with employees, by leaning too heavily on them for too long during the recession whilst giving little in return:
39% of workers feel their employers have broken an unspoken contract of loyalty with their staff over the past 12 months.
46% no longer have faith in their employer.
45% are now less proud to work for their organisation compared to a year ago
46% are less inclined to recommend it as a place to work to friends or family.
Hobby said: “Hay Group research shows that firms with an actively engaged workforce on average achieve two-and-a-half times greater revenue growth than those with low employee engagement. This not only represents a huge missed opportunity to companies that don’t engage their employees, but their ability to respond quickly and decisively to the upturn will also be greatly impeded without staff on side.”
Six tips to turnaround engagement
According to Hobby, it is not too late to turn this threat into an opportunity: “Organisations should take the lead from firms such as Nationwide, Serco and Reed Elsevier which have successfully maintained high levels of employee motivation and commitment throughout the recession.”
He proposes the following six tips for improving employee engagement:
1. Don’t stop communicating as things improve – this is the real danger point.
2. Refresh leadership development with a new focus on the role of trust – helping leaders move from simple honesty through transparency to integrity.
3. Support leaders with the emotional, political and creative space they need to admit uncertainties and communicate a new sense of direction.
4. Capitalise on changing attitudes to work and the psychological contract with a new employment proposition which meets workers’ needs that your competitors do not.
5. Identify high-risk individuals – those critical to the business who may be disaffected and target retention activities to these.
6. In the focus on engagement, do not forget enablement. Most workers say they could be more productive, talented workers want to do their job well and, at a time of cuts, waste and bureaucracy are amongst the biggest demotivators to the people you most want to keep.
Want to know more?
Title: The Loyalty Deficit, Hay Group, October 2009.
Survey details: The research is based on a study of 1,000 UK blue-collar workers, secretarial/administrative employees, first-line managers and professional technical staff across both the private and public sectors in the UK.
Availability: For a copy of the report, contact Hay Group’s London office, tel: 020 7856 7000.
“Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organise people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organisations realise their potential.” It has over 2,600 employees working in 85 offices in 47 countries. To find out more visit www.haygroup.com/uk.