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Research Summary: Employee Engagement Trends

Steady decline in engagement and job satisfaction

2010 Hewitt Associates study

Significant drop in employee engagement since the onset of the recession
Since July 2008, Hewitt has analyzed quarterly changes in engagement for over 900 organizations worldwide conducting annual studies on such topics as morale, confidence in the organization, trust in leadership, career opportunities, rewards and recognition.

Over the past two years, engagement has been steadily declining:

Hewitt's analysis links employee engagement levels and financial performance.

2009 Conference Board report

Growing job dissatisfaction over the past two decades
The Conference Board's survey of 5,000 households recorded the lowest level of American workers' job satisfaction in more than 22 years of studying the issue.

Sharpest decline among top performers

Towers Watson's 2009/2010 U.S. strategic rewards report

Long-term impact of employers' response to the recession
This May 2009 survey is based on responses from 1,300 U.S. workers. The findings show that employers' cost-cutting actions during the downturn lowered engagement from 2008 to 2009, most severely among top performers.

Top performers feel less confident about and less committed to their companies.

Top performers feel employers have changed the employee value proposition* (EVP).

*The EVP encompasses the collective array of programs and benefits that an organization offers in exchange for employment. The organization's brand, values, culture and leadership shape the EVP.

Towers Watson's 2009 Strategies for Growth survey

Inability to find and keep top talent—a threat to recovery and growth
According to this September 2009 global study of nearly 750 companies, the top five workforce challenges to post-recession growth are:

Need for a new EVP to retain and re-engage key talent

Towers Watson's 2010 Global Workforce study

Post-recession workplace—no longer business as usual
The global economic crisis has forced employers and employees to rethink the traditional employment deal. Studying over 20,000 employees in 22 markets from November 2009 to January 2010, this report reveals the post-recession employee mindset—one with lower expectations, increased anxiety and new priorities.

Key findings—low engagement, high anxiety and new priorities

Deep, long-lasting fallout from the recession and employers' response to it

Dramatic shift in the drivers of engagement since 2008

Desire for today's rarest commodity, security and stability

Anxiety about securing one's own future, financial and physical health and well-being

Declining mobility, with many sacrificing career advancement for job security

Low confidence in leaders and managers, particularly in their people skills

Lack of tools and support hindering self-reliance in the workplace

Takeaways for employers in today's "brave, new world"
The global workforce study findings imply the following employer challenges:

Where will employers wage the next "war for talent"?

In mature economies, how will companies plan for an aging workforce that is ready to settle in for years—either unable to retire or choosing not to?

How much can companies reasonably shift costs, responsibility and risk to employees?

How can companies foster effective leaders in the post-recession world—ones who are both competent managers and inspiring, people-centric leaders?

Forging a new employment deal or EVP
To remain competitive, employers must re-engage valued employees by defining a new, sustainable employment deal grounded in self-reliance, personalization and agility.

Self-reliance: Enabling employees to build their skills, plan for their financial future and live healthy lives—active security vs. passive security

Personalization: Segmenting the workforce to understand differing needs, preferences and perceptions; and using this insight to create more personalized work experiences

Agility: Embedding greater flexibility and scalability into the organization's talent and reward strategies and programs—and into the HR function itself

Effective communication as a driver of engagement and results

Towers Watson's 2009/2010 Communication ROI report

Communication practices of high-performing companies
This report examines data collected in April and May 2009, from 328 organizations representing five million employees around the world. It identifies how companies with highly effective communication practices are informing and engaging their employees in challenging economic times.

A leading indicator of financial performance

Defining and communicating the employee value proposition (EVP)

Communicating the combined value of reward programs

Helping leaders and managers communicate with employees

Customizing messages to maximize impact

Increasing use of electronic and face-to-face communications and social media

Having a documented communication strategy

Measuring communication effectiveness

The ROI of employee engagement

Gallup's Q12® meta-analysis

Positive link between employee engagement and business outcomes
Gallup's 2009 meta-analysis of 199 research studies across 152 organizations in 44 industries and 26 countries shows dramatic differences between top and bottom-quartile workgroups on key business outcomes. In total, this seventh iteration of the Q12 study examined the relationship between engagement and the following nine performance criteria for 32,394 business/work units comprising 955,905 employees:

Description of the Q12

Key findings of the latest Q12 meta-analysis

Comparing engaged vs. disengaged workgroups:

Median differences in nine performance criteria between the top and bottom quartile
workgroups are:

Beyond these significant differences between engaged and disengaged workgroups, Gallop research indicates that engaged organizations have 3.9x the EPS growth rate compared to those with lower engagement in their same industry.

Fortune's 100 Best Companies to Work For®


“Americans' job satisfaction falls to record low.” Associated Press, January 5, 2010.

Capitalizing on Effective Communication: How Courage, Innovation and Discipline Drive Business Results in Challenging Times — 2009/2010 Communication ROI Study Report. Towers Watson, December 2009.

Gibbons, John M. "I Can't Get No... Job Satisfaction, That Is." The Conference Board, January 2010. Great Place to Work Institute, Inc., 2010.

Harter, James K., Frank L. Schmidt, Emily A. Killham, and Sangeeta Agrawal. Q12® Meta-Analysis: The Relationship Between Engagement at Work and Organizational Outcomes. Gallop, August 2009.

“Hewitt Analysis Shows Steady Decline in Global Employee Engagement Levels.” Hewitt Associates (now Aon Hewitt), July 29, 2010.

“Jobless Recovery in the U.S. Leaving Trail of Recession-Weary Employees in Its Wake, According to New Study.” Towers Watson, March 16, 2010.

Looking Toward Recovery: Focusing on Talent and Rewards — 2009/2010 U.S. Strategic Rewards Report. Towers Watson , December 2009.

Strategies for Growth: Talent and Performance Issues Lie at the Heart of an Emerging Global Growth Agenda. Towers Watson, December 2010.

The New Employment Deal: How Far, How Fast and How Enduring? Insights from the 2010 Global Workforce Study. Towers Watson, 2010.

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