Monday, March 15, 2010

Engagement and the Workforce

From reading the news and blogs one has to ask—"is there really a crisis of disengagement in the workforce?" Many are concerned about this. As most readers will know, employee engagement is related to customer satisfaction, company productivity, and retaining good employees. So, it is a problem if engagement is down in a company. 

And, it seems like we are getting close to disengagement of crisis proportions. This is an acute concern to HR professionals. Let's look at the data in terms of employees leaving –quitting as the Bureau of Labor Statistics (BLS) calls it and in terms of engagement and satisfaction with jobs.

Engagement and Moving Jobs

Anecdotally I've heard many say – "I'd leave now if I had an option." Well, it turns out that the "quit rate" of last year was extraordinarily low. I did a little poking around at the (BLS)—last year voluntary quits (excluding retirements) is was at the lowest level since they began keeping records in 2001. Typically some 24% of American "quit" in a year. The chart below outlines the percentage of employed Americans who quit in a year—it looks like people do NOT have options—they are not leaving voluntarily right now!

Total US Total (nonfarm) Rate of Quitting

But, job security is not gone. I was surprised at a Gallup poll from August 2009 that found American workers are not as concerned with job security compared 2003. In 2009, 50% were completely satisfied with their job security. It is as if many employed workers are not threatened that they will be forced out; employed Americans do not seem terrified of being laid off.

Gallup Poll of Satisfaction with Job Security

The parallel nature of the Gallup and BLS trend lines is interesting—job security and quitting seem related. People are more apt to quit in times of higher job security.

We are slowly getting out of this recession. I wonder if increasing job security will lead to future quitting? No one knows the future, but it sure seems as if there might be a spike in quitting later this year or the next. Of course, every company is different.

Given that many feel they "can't move" jobs right now, you might think that psychological job engagement would be down. Simply put, stuck people disengage.  Everything I see is pointing to this trend—anecdotes and many converging surveys. To understand, I looked at some current surveys on engagement.

National Engagement Surveys Converge: Employee Engagement and Satisfaction is Down

A senior HR official at a fortune 100 technology company told me that when the recession first started measures of employee engagement went up—as if employees were happy to have a job. As the recession has worn on, however, engagement in her firm has dropped. It was as if the work load and stress has worn the spirits of employees down. National polls seem to echo this concern.

In a rare convergence of national polls, all data suggests engagement is down. Individuals have told me about divergent data, but I can't find it. As far as I can tell all sources say the same:

Right Management Consultants found that sixty percent of employees intend to leave and an additional one-in-four are networking and updating their resumes. They predict that turn-over will skyrocket this year. Here is the survey question/distribution of the survey of approximately 900 workers in North America:

Do you plan to pursue new job opportunities as the economy improves in 2010?
60% - Yes, I intend to leave
21% - Maybe, so I'm networking
6% - Not likely, but I've updated my resume
13% - No, I intend to stay

Gallup found employee engagement plummeted in 2009, much of this driven by job satisfaction. The Gallup organization's Work Environment Index includes four items: job satisfaction, ability to use one's strengths at work, trust and openness in the workplace, and whether one's supervisor treats him or her more like a boss or a partner. Gallup only asks these item questions of respondents who are currently employed by others. American workers' decreased job satisfaction (from an average 89.0% in 2008 to 88.0% in 2009) contributed most significantly to the decline in the Work Environment Index overall.

The Work Environment Index saw the largest year-over-year drop, declining to 49.2 in 2009 from 51.4 in 2008, a loss of 2.2 points overall.

The Conference board, based on a survey of 5,000 U.S. households reports that only 45 percent of those surveyed say they are satisfied with their jobs, down from 61.1 percent in 1987, the first year in which the survey was conducted.

Untangling Engagement

In the technology company I mentioned above, management is aggressively addressing engagement by sharpening strategy and making sure that every employee understands how they contribute to the company's success.

I've heard from other consultants and clients fearing engagement and what it means for retaining top talent. This is the time to think about it—before resumes get out there and top talent are offered good deals.

What is engagement anyway?  What can improve engagement? Is it just related to business cycles? What kind of engagement matters for different organizations? There are so many related questions. Please comment on this post and I will be back next week with more research, viewpoints and models as I attempt to answer these questions.

From Jackson NH
Charley Morrow


Matt said...

Have you considered the effect of health insurance job lock? I have spoken to several white collar workers who have either a pre-existing condition or dependents with the same who cannot would like to leave their job or become entrepreneurs but would lose their health insurance and be unable to procure new coverage.

Charley C Morrow said...

Hi Matt, I'm not up on the latest version of health care reform. But, it seems to me that increased job mobility could be an unintended consequence of reform.

Times are a changing, the implicit contract between employees and employers is not what it once was. Now laws may be cementing this into place.

Will Thalheimer said...

Charley, GREAT Blog post. It got me thinking. Check out my full response. Essentially, the stuff you uncovered has incredible implications for today's Great-Recession organizations (that's everybody by the way).

I hope your next blog post will talk about implications of this trend and how you think organizations can overcome this problem of "employment handcuffing."

Keep up the good work!!

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