North America sees lowest levels of employee engagement since 2008: Aon Hewitt

Career opportunities, organization reputation top drivers
|hrreporter.com|Last Updated: 05/21/2013

While the economy in North America has shown steady improvement over the past year, a new analysis by Aon Hewitt reveals that employers and the workforce are not yet following suit. Employee engagement levels in North America have declined to the lowest levels since 2008 and the way employees perceived their general work experience in 2012 remains unchanged from the prior year.

Aon Hewitt's Global Engagement Report, which analyzed employee engagement trends of more than 2,500 global organizations representing 3.8 million employees, found that employee engagement in North America decreased by one percentage point to 63 per cent in 2012.

While certain areas had increases in employee perception scores, others dropped. Areas with the highest increases in employee perception scores in North America include:

• innovation (up 13 percentage points)
• effective communication ( up seven percentage points)
• managing performance (up seven percentage points)
• pay (up three percentage points).

Areas where work experience scores worsened in 2012 include:

• diversity (down nine percentage points)
• customer experiences (down seven percentage points)
• business unit/division leadership (down four percentage points).

"While some aspects of the work experience have improved in North America, the overall drop in engagement could indicate that companies have not been sufficiently investing in talent," said Ken Oehler, Aon Hewitt's global engagement practice leader. "As North American organizations grapple with competing pressures — demand for profitable growth, financial market volatility, political uncertainty and global shifts in workforce demographics — declining engagement levels may have negative, longer-term consequences on business performance. Our survey findings signal a call to action for leaders to make employee engagement a business imperative."

Leaders at North American organizations are likely to get the highest return on investment in employee engagement if they take ownership of employee engagement and focus on improving the drivers that matter most to employees, said Aon Hewitt. The areas that ranked as the top engagement drivers for employees in North America were:

Career opportunities: For the fifth consecutive year — globally as well as across North America — career opportunities remained the top driver to positively impact overall engagement levels. Yet a little over one-half  (53 per cent) of employees in North America think they have good advancement opportunities at their organization.

"Employers should focus on improving advancement opportunities for their high potentials and the highly engaged," said Lorraine Stomski, head of Aon Hewitt's leadership practice. "Placing these individuals in challenging stretch assignments will keep them motivated and will enable organizations to put their best talent in the most impactful positions. To excel in this area, managers should have more frequent career coaching conversations with their employees."

Enabling performance: While enabling performance was the second highest engagement driver in North American, just little over one-half (58 per cent) of employees say they have the tools and resources needed to perform effectively in their organization. Simply removing barriers to performance — such as clarifying goals, reducing process complexity and ensuring technology supports productivity — will help decrease anxiety, stress and frustration and fully unlock an individual's potential and performance.

Reputation: Just six out of 10 employees in North America know what their organization wants to be famous for in the market, yet this is the third most important engagement driver. Without a clear and concise organizational response to this question, it is difficult to attract, retain and engage the talent needed for organizational success.

"The reputation of an organization is a function of business performance, social responsibility and general impressions. It is also very much about what people in the job market think about an organization as a place to work," said Oehler.

Communication: One-half of employees around the world think their company is effective at communicating with employees. Engaging communication that tells employees about the organization, where they fit in and the path forward goes a long way in making employees feel like they are adding value and contributing to the bottom line.

Recognition: Employees want recognition for their performance and recognition for how difficult things have been. However, only 50 per cent of employees in North America think their employer currently recognizes this type of extra effort.

"As companies continue to manage expenses and focus on growth, recognition can be very effective at motivating employees and often comes at little to no cost to the organization," said Oehler.

Engagement levels by region
Aon Hewitt's analysis shows overall employee engagement levels worldwide improved from 58 per cent in 2011 to 60 per cent in 2012. North America was the only region to see a decrease in employee engagement levels in 2012. Despite continued economic and business pressures, the largest engagement increase was in Europe, improving five percentage points. Latin America's engagement scores improved three percentage points, and Asia Pacific's remained consistent with those from 2011.

Engagement by segments
Executives and senior managers in North America are the most engaged (75 per cent) followed by middle managers, team leaders and supervisors (68 per cent). Team members, or front-line employees, had the lowest level of engagement at 65 per cent.

When analyzing the data by generation, baby boomers had the highest level of engagement, with 63 per cent engaged, followed by generation X (58 per cent) and Millennials (57 per cent).

"The multicultural, multi-generational and cross-geographical world represents new challenges for leaders who are trying to drive high levels of employee engagement," said Oehler. "Understanding the differences that exist by job function, generation and job level allows organizations to identify critical gaps in where they need to invest their resources and also helps them better understand how to tailor engagement strategies to attract a specific group of people."

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