Depressed Employee Engagement Stunts Global Business Performance
July 12, 2012 — Global firms' performance continues to be stunted, with more than a third of employees across the world unwilling and unable to go the extra mile for their organization, according to Hay Group research.
On average this year, 66% of workers feel engaged — a marginal rebound over the past 12 months, but still falling significantly behind the world's highest performing companies that boast engagement levels of 75%.
More than a third of employees also reported that they are unable to perform optimally, with an average of 33% of workers claiming that barriers put in place by the organization are preventing them from excelling at work.
Hay Group examined annual engagement and enablement levels in 1,610 organizations across 46 countries, representing almost five million employees.
Worldwide employee engagement levels have made only a tentative recovery from last year's five-year low. Global engagement levels have been falling consistently since 2007, reaching just two-thirds (65%) last year.
"Over the past few years we have seen employee engagement across the world decline or stagnate at 2008 levels — well behind the best performing companies — at the very point when organizations around the world are needing to deliver better performance," said Mark Royal, senior principal at Hay Group.
Europe and Pacific face the greatest threat from employee disengagement, with engagement levels falling to a five-year low of just 63% of the workforce. Levels of engagement in Asia also stand at 63%, although this represents a minor rise of one percentage point over the past 12 months. In the Middle East, engagement has stagnated at 64%, with no change since the height of the recession in 2008.
The Americas present a brighter picture. Engagement levels in South American firms now stand at nearly three-quarters (73%) of the workforce, on par with 2008. Engagement in North America has fallen by three percentage points since 2009, but still remains ahead of global averages at 69%.
74% of South American workers feel motivated to go beyond their formal job responsibilities, compared with just 66% of employees in Europe and the Middle East. South America also enjoys the highest levels of employee pride, with more than four in five employees (86%) feeling proud to work for their companies.
Hay Group's data also shows that employees across the globe are not properly supported at work — and are unable to perform to their full potential as a result. Fewer than two-thirds of employees around the world (62%) feel that conditions at work allow them to be as productive as they could be. This falls to a low 58% in Europe and the Middle East.
Even in South America — where the majority of employees feel motivated to go beyond their formal job responsibilities (74%) — only 61% feel as if their companies provide the right environment for them to perform at their best. This is a trend evident across all global regions.
"We are seeing a stubborn gap between the discretionary effort employees across the world are willing to put into their work and the level of support available to help them excel," Royal said. "For organizations looking to harness the full productivity of their workforce, leaving this pool of motivation untapped is a wasted opportunity. To truly drive productivity, business leaders must understand the role they have to play in enabling high levels of performance — removing the barriers that are holding their employees and their organizations back."
Long-term commitment is a casualty of low levels of employee engagement and employee enablement, according to Hay Group’s research, with commitment levels falling to a five-year low in every major region.
More than two-fifths (44%) of the global workforce intend to leave their employers within five years, with more than one in five employees (21%) intending to leave in less than two years. Employee commitment is highest in North America, with three in five employees (62%) intending to stay with their employer for five years or more. However, commitment has declined by 5% since last year. Commitment is lowest in Pacific, with 54% of the workforce intending to leave their companies within five years.
"Low engagement and enablement levels are depressing company performance worldwide," Royal said. "However, an important challenge to business is the looming threat of increased employee turnover. While tight labor market conditions have reduced staff churn, there is a build-up of restless and frustrated employees, which now amounts to more than two-fifths of companies' workers. A small improvement in the labor market is likely to provoke a dramatic rise in employee mobility. Unfortunately, it is often the best performing, highest potential workers who are prepared to vote with their feet if the organization doesn't give them what they need to deliver."