Employers face heightened performance risk — from lower productivity to higher inefficiency
NEW YORK, July 11, 2012 — As doubts reemerge about the strength of economic recovery in the U.S., a new Global Workforce Study by global professional services company Towers Watson (NYSE, NASDAQ: TW) reveals that almost two-thirds (63%) of U.S. workers are not fully engaged in their work and are struggling to cope with work situations that don’t provide sufficient support. This finding suggests employees are finding it difficult to sustain the kind of positive connection to their companies that yields consistent productivity — the result of almost a decade of pressure to do more with less and respond to the challenges of global competition, ever-evolving technology and the ongoing need for strict cost management.
“When workers are not fully engaged, it leads to greater performance risk for employers. It makes companies more vulnerable to lower productivity, higher inefficiency, weaker customer service, and greater rates of absenteeism and turnover,” said Julie Gebauer, managing director, Talent and Rewards, Towers Watson. “Without attention and interventions aimed at improving on-the-job support for employees and creating a sense of attachment to the organization, this trend could worsen — and directly affect business outcomes. Companies have known for years that employee engagement is important to business performance. We’re now seeing — in part because of the tough business climate — that engagement is quite fragile and will not be sustained over time without careful attention to very specific elements in the work environment.”
A Fresh Perspective on Engagement
The study breaks new ground in understanding and measuring what contributes to sustained employee engagement in the workplace today, and demonstrates the strength of the relationship between “sustainable engagement” and specific financial outcomes for employers.
“Sustainable engagement is an important evolution in the science of workforce behavior — and it’s an approach well suited to the unique aspects of the current work environment,” said Laura Sejen, global practice leader, Rewards, Towers Watson. “It recognizes that employees need support from their employer to continue to give discretionary effort on the job, and right now, employees are telling us they’re not getting that support in the way and at a level they need.
“This is an important wake-up call for U.S. companies if they hope to sustain their growth,” Sejen continued. “When we looked at sustainable engagement scores among 50 global companies in a related piece of research and examined their one-year operating margins, we saw dramatic evidence of the impact of sustainable engagement on performance. The companies with high sustainable engagement had operating margins almost three times those of organizations with a largely disengaged workforce. That fact alone creates a compelling case for change.”
Sustainable engagement starts with basic engagement, defined as employees\’ willingness to expend discretionary effort on their job. It also requires enablement — having the tools, resources and support to do their job effectively, as well as energy, through a work environment that actively supports employees’ well-being. “Enablement and energy are critical factors in this equation,” Gebauer pointed out. “In the last several years, when we’ve seen much more pressure in the system, their importance has risen to the fore. Engagement will only hold over time with these elements in place.”
The Towers Watson study uses a specific set of questions to measure and classify respondents as to their level of sustainable engagement. Overall, the study showed that only 37% of U.S. workers are highly engaged in a sustainable way, meaning they scored high on all three elements of sustainable engagement. Just over one-quarter (27%) are classified as unsupported, meaning they display traditional engagement, but lack the enablement and/or energy required for sustainable engagement. Thirteen percent are detached, meaning they feel enabled and/or energized but are not willing to go the extra mile. And almost one-quarter (23%) are completely disengaged, with less favorable scores for all three aspects of sustainable engagement.
Understand Gaps: The Unsupported and Detached
The study identifies specific attributes of a work environment that are critical to traditional engagement, enablement and energy, highlighting actions employers can take to improve engagement and increase productivity. For the unsupported, not surprisingly, the most significant factors relate to how their supervisors support them on the job, their levels of stress and the severity of their workloads. For the detached, by contrast, company leadership stood as the focal point. Detached workers lack an emotional connection to the organization, stemming from feelings that they do not work for a company with strong values, clear vision, and a leadership team that takes employees’ interests and needs into account.
“Many companies are still operating in a traditional mode, with processes and programs designed for an era that has effectively disappeared,” Sejen said. “Employers need to consider the dramatic changes occurring in the employment relationship, and they need to address the elements creating this situation. The consequences of maintaining the status quo may be more problematic than before, given the level and pace of change.”
When considering the unsupported 27% of the workforce, clear areas for employer focus emerged. For instance:
— Just 43% of them agreed that their supervisors had adequately removed obstacles to helping them perform their job well.
— A mere 26% agreed management involved employees in decisions that affected them.
— Only 48% felt the amount of work they had to do was reasonable.
— Just 40% of the unsupported felt they had enough employees in their work group to get the job done correctly.
Far more of the highly engaged employees — with responses at least 30 percentage points higher — are positive about these areas.
The detached segment demonstrated little confidence in senior leadership. When asked if they had trust and confidence in the performance of their company’s senior team, just 25% agreed — a 52-percentage-point disparity from the 77% of the highly engaged who agreed with the statement. And when asked whether they agreed that senior leadership had a sincere interest in employees’ well-being, a 45-percentage-point gap appeared between the detached (26%) and the highly engaged (71%).
Recipe for Success
Although the unsupported and detached segments comprise two-fifths of the study sample and represent a risk for employers, they also represent an opportunity. The study findings point to specific actions employers can take to address the elements missing for these individuals in the work environment, putting solutions directly within companies’ control.
“There is a real imperative for change right now. The risks of continuing to manage with traditional practices are just too great from a performance perspective. And everyone in an organization has a role to play in helping close gaps in employees’ feelings of enablement and energy — from executives, to supervisors, to human resources, to employees themselves,” Gebauer said. “By taking actions to address identified gaps, organizations will be able to move some of the unsupported and detached to engaged — and likely experience a measurable and positive impact on financial performance.”
Other key findings from the study include:
— Fewer than half (47%) agree there are no substantial obstacles to getting their job done well.
— Slightly more than half (53%) don’t feel their organization makes it possible for them to have a healthy balance between work and personal life.
— Just under a third (30%) say they’re bothered by excess pressure on the job.
— Just under half (47%) believe their supervisors don’t have enough time to handle the people aspects of their role.
— Under one-third (32%) say their organization does a good job of providing opportunities for advancement.
— Only 37% agree their senior management does a good job at developing future leaders.
— Just under half (49%) say they have trust and confidence in their company’s senior leadership team.
About the Study
The Towers Watson Global Workforce Study covers more than 32,000 employees selected from research panels that represent the populations of full-time employees working in large and midsize organizations across a range of industries in 29 markets around the world. It was fielded online during February and March 2012. The U.S. sample includes 3,600 employees and has a margin of error of ±2%.
The study is designed to help companies better understand their diverse employee segments and the factors that influence employee performance on the job by gauging changing attitudes that affect attraction, retention, engagement and productivity.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com