Hewitt Cites Growing Employee Unrest

Key morale indicator falls to 15-year low.

While the economy is slowly recovering, a new analysis by Hewitt Associates shows employee engagement and morale in the workplace are not.

The data show tax, accounting and finance organizations the importance of employee morale and engagement in creating a productive workplace.

Almost half of organizations around the world saw a significant drop in employee engagement levels at the end of the June 2010 quarter — the largest decline Hewitt has observed since it began conducting employee engagement research 15 years ago. This highlights the growing tension between employers — many of which are struggling to stabilize their financial situation — and employees, who are showing fatigue in response to a lengthy period of stress, uncertainty and confusion brought about by the recession and their company’s actions.

Since July 2008, at the onset of the economic downturn, Hewitt began closely analyzing changes in employee engagement levels by quarter for more than 900 organizations globally that conducted annual engagement studies. These studies covered topics such as employee morale, confidence in the organization, career opportunities, rewards and recognition programs, and trust in leadership.

Historically, Hewitt’s research shows that about half of these organizations improved their engagement levels in a one-or-two year period, while only 15 percent had experienced a decline. However, the past two years have been more challenging: the percent of organizations with declining engagement has been steadily growing. This trend is particularly notable in 2010. Hewitt’s research shows that 46 percent of organizations experienced a decline in engagement levels in the quarter ending June 2010, while just 30 percent saw an improvement.

“The economic situation over the past two years has clearly strained the connection between employers and employees and the stress continues to increase,” said Ted Marusarz, leader of Global Engagement and Culture at Hewitt. “Organizations are struggling to improve employee engagement, but they need to stay focused. The extra effort companies put forth now will make a difference in how successful they are at boosting employee morale and retaining top talent as the economy stabilizes and employee opportunities open up.”

Engagement Linked to Financial Performance

Hewitt’s analysis suggests a clear link between employee engagement levels and financial performance. Organizations with high levels of engagement (where 65 percent or more of employees are engaged) outperformed the total stock market index even in volatile economic conditions. During 2009, total shareholder return for these companies was 19 percent higher than the average total shareholder return. Conversely, companies with low engagement (where less than 40 percent of employees are engaged) had a total shareholder return that was 44 percent lower than the average.

via Hewitt

3 Responses to “Hewitt Cites Growing Employee Unrest”

  1. Skip Weisman

    Mark,
    The term “employee engagement” can have many meanings to many different people. However, in my consulting practice to help companies develop a more engaged workforce I’ve gravitated to this definition from research by The Conference Board a couple of year ago, which defines empoyee engagement as:

    “a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work”.”

    Another way to define ’employee engagement is a group of passionate employees who love coming to work each day, contribute to the organization at a high level, they act in a proactive manner with creative and innovative ideas because they feel connected to their work, their company and its purpose.”

    The Conference Board offered 8 Key Drivers to evaluate when measuring employee engagement:

    * Trust and integrity – how well managers communicate and ‘walk the talk’.

    * Nature of the job –Is it mentally stimulating day-to-day?

    * Line of sight between employee performance and company performance – Does the employee understand how their work contributes to the company’s performance?

    * Career Growth opportunities –Are there future opportunities for growth?

    * Pride about the company – How much self-esteem does the employee feel by being associated with their company?

    * Coworkers/team members – significantly influence one’s level of engagement

    * Employee development – Is the company making an effort to develop the employee’s skills?

    * Relationship with one’s manager – Does the employee value his or her relationship with his or her manager?

    hope that helps.
    Skip

  2. Mark F Schauwecker, CPA

    Can you further explain the term “employee engagement levels”?

  3. Anonymous

    I see Hewitt is interested in employee morale!