Depressed Employee Engagement Stunts Global Business Performance: Hay Group Study
Hay Group (Business Wire India)
New Delhi, Delhi, India
Indian employees looking for an engaging workplace, 60 per cent of them planning to leave their present jobs within five years
-- Just two-thirds of worldwide employees are engaged
-- Employee engagement levels in India stand marginally higher than the Asia average, at 68 per cent
-- 58 per cent of employees in India set to exit their present organizations before 2017
-- Global firms lose ground to the highest performing organizations, where engagement levels found to be 75 per cent
-- Company loyalty hits five-year low
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 new research from global management consultancy Hay Group.
The study shows that this year on average 66 per cent of workers feel engaged
-- rebounding marginally over the last twelve months, but still falling significantly behind the world’s highest performing companies (which boast engagement levels of 75 per cent).
More than a third of employees also reported that they are unable to perform optimally, with an average of 33 per cent of workers claiming that barriers put in place by the organization are preventing them from excelling at work. Indian employers find themselves in the same boat, with one in every three employees worried about workplace barriers inhibiting their capability to support the organization for success.
Hay Group examined annual engagement1 and enablement2 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 had been falling consistently since 2007, reaching just two-thirds (65 per cent) last year.
Mark Royal, senior principal at Hay Group and author of The Enemy of Engagement, comments: “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.”
Says Gaurav Lahiri, Managing Director at Hay Group India: “Measuring how engaged your staff really is with your organization could make for frightening reading. But, these days more than ever, employee engagement must be part of any company’s key performance indicators and should be tied into decisions that affect return on investment.”
Employee Engagement Stagnates
Levels of engagement in Asia stand at 63 per cent, which represents a minor rise of one percentage point over the last twelve months. India has performed marginally higher than the Asia average, with more than two in every three employees found to be effectively engaged.
Europe and Pacific face the greatest threat from employee disengagement, with engagement levels falling to a five-year low of just 63 per cent of the workforce. In the Middle East, engagement has stagnated at 64 per cent, with no change since the height of recession in 2008.
Gaurav Lahiri comments: “Faced with a challenging global economic climate, many organizations in the region are needing to do more with less, giving them good reason to focus on enhancing levels of employee engagement. To get the most from engaged employees, motivation to contribute has to be matched with the ability to contribute – what we call ‘employee enablement’.”
Asian employees less engaged than their counterparts in the Middle East and Americas
Despite the alarming engagement figures at the global level, Asian organizations lag further behind their global counterparts by three percentage points, at 63 per cent.
The Americas present a brighter picture. Engagement levels in South American firms now stand at nearly three quarters (73 per cent) 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 per cent.
An impressive three quarters (74 per cent) of South American workers feel motivated to go beyond their formal job responsibilities, compared with just 66 per cent 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 per cent) feeling proud to work for their companies.
Firms Holding Employees Back
Hay Group’s unique 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.
Less than two thirds of employees around the world (62 per cent) feel that conditions at work allow them to be as productive as they could be. This falls to a low 58 per cent in Europe and the Middle East. Employees based in India are slightly better off; however, more than a quarter admit that they could be more effective if workplace conditions allow for greater productivity.
Even in South America – where the majority of employees feel motivated to go beyond their formal job responsibilities (74 per cent) – only 61 per cent 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.
Mark Royal comments: “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. 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.”
Gaurav Lahiri explains: “In our view, the ability of engaged individuals to make maximum contributions has two key components. The first, personal utilization, requires that employees are effectively matched to their roles, such that their skills and abilities are put to best use. The second component, an enabling environment, involves structuring work arrangements such that they facilitate, rather than hinder, individual productivity.”
Company Loyalty Plummets
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 per cent) of the global workforce intend to leave their employers within five years, with more than one in five employees (21 per cent) intending to leave in less than two years. A much larger majority of employees in India (58 per cent) have acknowledged their intent to exit their present organizations within the next years, with about one in every three planning this shift within two years itself.
At the regional level, the Pacific finds itself with the lowest level of employee commitment, with 54 per cent of the workforce intending to leave their companies within five years. Employee commitment is highest in North America with three in five employees (62 per cent) intending to stay with their employer for five years or more. However, commitment has declined by five per cent since last year.
Mark Royal comments: “Low engagement and enablement levels are depressing company performance worldwide. 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 buildup 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.”
Gaurav Lahiri adds: “It is a worrying sign that Indian organizations, despite averaging higher engagement levels than the Asia average, find that only about 40 per cent intend to remain loyal to their present organizations in the next five years. Frustrated employees are unlikely to persist over the long-term in this state. Clearly, the opportunities currently available for organizations to improve the bottom line by actively engaging the workforce have never been so good – and the time to act is now.”
Please note: this study should be credited to ‘global management consultancy, Hay Group’, and not ‘Hay’ or ‘Hays’, which are separate and unrelated organizations.
Notes to Editors
-- Engagement is the result organizations achieve when they stimulate employees' enthusiasm for their work and direct it toward organizational success. It includes:
- Commitment. Employees are proud to work for the organization, would recommend it as a place to work and express an intention to stay.
-- Discretionary effort. Employees are willing to 'go the extra mile' to help the organization succeed.
-- Employees are 'enabled' when jobs and work environments support them to channel their enthusiasm into productive action. Enablement includes:
-- Optimized roles. Jobs make good use of skills and abilities and work is challenging and interesting.
-- Supportive environments. The workplace is free from significant barriers to getting the job done and employees feel as productive as they can be.
About the study
The study is based on information from Hay Group’s Insight database, which includes information from 1,610 organizations across 46 countries, representing 4,55,9762 employees.
About Hay Group
Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organizations realize their potential.
We have over 2600 employees working in 85 offices in 49 countries. Our insight is supported by robust data from over 100 countries. Our clients are from the private, public and not-for-profit sectors, across every major industry. For more information please contact us through www.haygroup.com/in.
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