Employee engagement levels across North America have hit a four-year low, according to a report by Aon Hewitt.
Sixty-three per cent of North American workers were engaged in 2012 (the same amount as in 2008), down from 64 per cent in 2011 and 2010, and a high of 67 per cent in 2009.
“Pay freezes, benefit cuts and layoffs are still at the forefront of many employees’ thinking. The continued high rates of unemployment, lack of hiring and extended hiring cycles for open positions create further stress and uncertainty for employees, making it difficult to achieve or maintain healthy levels of engagement,” found the 2013 Trends in Global Employee Engagement, which analyzed employee engagement trends at more than 2,500 global organizations representing 3.8 million employees.
Four in 10 (37 per cent) employees in North America are not engaged. Furthermore, 17 per cent are actively disengaged — they are negative about their company, do not particularly want to remain there and do not go above and beyond in doing their jobs.
“The way work is done now, by and large, involves quite a bit of collaboration. We’re no longer working in a model where you have one person sitting and doing a job in isolation… so any act of disengagement or low engagement has a real spillover effect on co-workers,” said Steven Fitzgerald, president of Habanero Consulting Group in Vancouver. “It brings everyone’s productivity, morale and connection down.”
The report analyzed the key drivers of employee engagement. In North America, career opportunities came out as the top driver for the fifth consecutive year. One-half (53 per cent) of employees believe they have good advancement opportunities at their organization.
“How well is the leadership of the organization describing the organization’s future and is this something I believe in? Do I believe in what leadership is saying? Do I believe in the story? Do I understand how I fit into that picture? You have these real macro factors that will set the tone for career opportunities,” said Neil Crawford, a partner at Aon Hewitt in Toronto.
Employers also need to set clear expectations around what opportunities are available, and the process for awarding such opportunities needs to be fair, he said.
Managing performance ranked as the second highest engagement driver. But just 58 per cent of employees in North America say they have the tools and resources needed to perform effectively at their organization. Employers should ensure they are clarifying goals, reducing process complexity and offering technology that supports productivity, said the report.
“You can’t lay expectations on individuals to achieve results but not give them the tools they need to be able to succeed, whether that be time, resource, education,” said Kenton Needham, director of HR at the University of Waterloo in Ontario.
“Performance management itself is an ongoing coaching exercise between a manager and employee to give the employee opportunities to be successful and for the manager to provide guidance and remove roadblocks.”
Organization reputation is the third most important engagement driver for North American employees. This is a function of a variety of factors including business performance, social responsibility, general impressions and what the organization is like as a place to work, according to the report.
“The reputation of the company has to match the truth of what people inside the organization see and feel every day,” said Fitzgerald. “External brands that are inauthentic in how people actually experience working in that organization are detrimental to engagement.”
Communication ranked as the fourth most important engagement driver. One-half (49 per cent) of employees think their company is effective at communication.
“Good communication is not just a top-down thing or a weekly video from the CEO — it’s communication that’s flowing in all directions, all the time,” said Fitzgerald.
Organizations need to make sure their communications processes are a “well-oiled machine,” said Crawford. Whenever someone discusses or does something, her next reaction should be “What do I need to communicate? Who do I need to communicate with? What’s the message?” he said.
Recognition rounds out the top five key engagement drivers. Just 50 per cent of employees in North America feel they receive sufficient recognition from their employer.
“We want others to notice that we’ve made a difference, that we’ve made a contribution… It’s not about the programs, not about the gold watch, it’s all about the managers’ behaviour, all about the senior leaders’ behaviour,” said Crawford.
It’s important that recognition is authentic and personalized, said Needham.
“Some people are completely adverse to being publicly recognized but that doesn’t mean there’s not a place for authenticity when someone does a good job to actually recognize and acknowledge and take the time to notice,” he said.
Job level variations
Aon Hewitt’s report also showed differences in engagement levels by job level. Executives and senior managers in North America were the most engaged (75 per cent), followed by middle managers, team leaders and supervisors (68 per cent).
“This is not particularly surprising since this group is likely the most involved with planning and executing efforts designed to enhance engagement,” said the report. “Executives and senior managers are also likely to be the group with access to the greatest career opportunities, pay and advantages of a strong organizational reputation.”
Front-line employees had the lowest engagement score at 65 per cent.
When it comes to generational differences, baby boomers had the highest level of engagement (63 per cent), followed by gen X (58 per cent) and gen Y (57 per cent).
One reason for this may be that baby boomers have been at their organization for a long time and have made the decision to stay, while gen-Y employees are new to their organizations and may still be figuring out if it is the right fit for them, said Crawford.
Another reason may be employers seem to be slow to pick up on the different ways new generations work, said Fitzgerald.
“There are still organizations that think social media technology is a bad thing,” he said. “They are resistant to change, yet this is how people function now and how they will be most effective at doing their jobs, so companies need to be open to social (media).”
Benefits of high engagement
Employers that have higher employee engagement relative to their peers see “dramatic, positive impacts to their revenue growth,” found the report. Employers with engagement levels of 72 per cent or higher attain 50 per cent higher total shareholder return than the average organization, it said.
But there are more benefits than just improving the bottom line, said Fitzgerald.
“Every organization should have a specific purpose, a reason why they exist and that’s probably not return on shareholder investment,” he said. “(High employee engagement) will make an organization more successful in all dimensions and, more importantly, it will make you more successful in the key dimensions that are more focused on the true purpose of that organization.”
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