Employee disengagement a global epidemic

At a time when companies are focused on growth and relying on their workforces to achieve it, a major new survey has found that only one in seven employees worldwide are fully engaged with their jobs and willing to go the extra mile for their companies.

But the study, by consultants Towers Perrin, found that while many people are keen to contribute more at work, the behaviour of their managers and culture of their organisations is actively discouraging them from doing so.

The study, the largest of its kind, was carried out among more than 85,000 people working for large and midsize companies in 16 countries on four continents.

It shows that there is a vast reserve of untapped "employee performance potential" that could drive better financial results if only companies could tap into this reserve.

"What we're hearing is that people want to contribute more. But they say their leaders and supervisors unintentionally put obstacles in their paths," said Donald Lowman, a Managing Director of Towers Perrin HR Services business.

"The insights from our study give management a very clear road map on how to remove these obstacles and unleash the full potential of the workforce to deliver superior performance."

According to the survey, employee engagement - the measure of people's willingness and ability to give discretionary effort at work - varies dramatically worldwide.

The highest recorded levels are in Brazil (31 per cent) and Mexico (40 per cent). The lowest recorded levels - in the low single digits - are in the four Asian countries in the study, with Japan bringing up the rear.

Across Europe and North America, engagement levels fall in between these extremes.

"The vast majority of the people we surveyed are moderately engaged at best, and a quarter of them are actively disengaged," Lowman noted.

"This creates serious risks for companies since companies with fewer engaged workers are far less likely to deliver on their growth agendas or achieve the kind of performance that shareholders demand."

The elements that define engagement include emotional aspects, like taking pride in working for a company, and rational aspects, like understanding how your job fits into 'the bigger picture'.

But how a company establishes these emotional and rational connections with employees differs considerably depending on where it operates.

Engagement also appears to have little to do with economic conditions in the country where an employee works.

Only eight per cent of Chinese employees in the survey felt engaged, for example, despite (or because of) its fast-growth economy. But in Germany's slowing economy, almost twice as many employees feel highly engaged.

"In the United States, meanwhile, employees are frustrated and sceptical about both their senior leadership and how well their company is delivering on their "employment deal".

"Employees in the United States feel they've hung in during the tough years," said Julie Gebauer of Towers Perrin's Workforce Effectiveness practice.

"They don't think they've seen enough in terms of pay raises, incentives or other rewards for their contributions - despite hearing lots of talk about 'pay for performance.' And this view appears to be intensifying as the economy regains steam.

"What's more, this perception is also creating retention risks," Gebauer continued. "More than half of our U.S. respondents (55 per cent) are what we call 'passive job seekers' - open and vulnerable to other job offers."

The study shows that highly engaged workers believe they can and do contribute more directly to business results than do less engaged employees.

For example, more than eight out of 10 highly engaged employees believe they can positively impact the quality of their company's products, compared with only one in three of the disengaged.

Smartly, almost three-quarters of the highly engaged believe they can positively affect customer service, versus a quarter of the disengaged.

Highly engaged employees are also far less likely to leave for another job than their less engaged peers. Worldwide, six out of 10 highly engaged employees planned to stay with their current employer, compared with just a quarter those who felt disengaged.

"Not surprisingly, workforce engagement is increasingly a boardroom issue," Lowman continued. "We are seeing the notion of a 'war for talent' give way to a quest for employees' discretionary effort.

"In my work, I see more and more boards holding senior management accountable for taking steps to attract, retain and engage the people needed to carry out the company's strategy.

"It's viewed as a critical part of overall leadership effectiveness, as well as an element of business risk that needs to be managed through the corporate governance process."