The disengagement gap

Oct 23 2007 by Nic Paton Print This Article

Most workers believe their senior managers are largely a waste of space, doing little to motivate them to go the extra mile at work and failing to help them contribute to the success of their organisation.

A poll of almost 90,000 workers worldwide by workplace consultancy Towers Perrin found many employees did not believe their organisation or senior management were doing enough to help or keep them engaged.

Just a fifth said they felt engaged in their work, with more than a third admitting to feeling partly or fully disengaged.

Unsurprisingly, companies with the highest levels of employee engagement achieved the best financial results and were more successful in retaining their most valued employees than those with lower levels, the study found.

"It's impossible to overstate the importance of an engaged workforce on a company's bottom line," said Julie Gebauer, managing director and leader of Towers Perrin's Workforce Effectiveness consulting practice.

"The Global Workforce Study establishes a definitive link between levels of engagement and financial performance and, for the first time, begins to quantify that link.

The organisation itself is the most powerful influencer of employee engagement
"It demonstrates that, at a time when companies are looking for every source of competitive advantage, the workforce itself represents the largest reservoir of untapped potential," she added.

The most striking data about the linkage between employee engagement and financial performance come from a study of 40 global companies that involved a regression analysis of company financial results against engagement data.

It found that firms with the highest percentage of engaged employees collectively increased operating income by 19 per cent and earnings per share by 28 per cent year-to-year.

Those companies with the lowest percentage of engaged employees showed year-to-year declines of a third in operating income and more than a tenth in earnings per share.

Among the 5,000 UK employees surveyed, fewer than a third believed senior management communicated openly and honestly with them and two-thirds felt that senior leaders "treat us as just another part of the organisation to be managed" or "as if we don't matter".

Furthermore, just one in three employees thought senior management had a sincere interest in their satisfaction and well-being.

The global study also made a direct link between engagement and the retention of employees.

Half of the engaged employees had no plans to leave their company, compared with just 15 per cent of the disengaged.

Fewer than five per cent of engaged employees said they were actively looking for another job, compared with more than one in four of the disengaged employees.

"One of the study's key findings is that the organisation itself is the most powerful influencer of employee engagement," said Gebauer.

"Personal values and work experience factors have less of an impact on engagement than what the company does – particularly the extent to which employees believe senior management is sincerely interested in their well-being. This was the number one element driving engagement on a global basis and also in the U.S.

"People's views about the company are also shaped more by what senior leaders say and do than by what the individuals' direct bosses say or do. This too contradicts conventional wisdom and suggests that companies have a real opportunity to dramatically improve both engagement levels – starting with listening to what their own employees have to say," she added.

Fewer than four out of 10 employees felt senior management communicated openly and honestly, and just 44 per cent agreed senior management tried to be visible and accessible.

In addition, only a tenth agreed that "senior management treats us as if we're the most important part of the organisation".

Only marginally better than in the UK, more than half felt senior management "treats us as just another part of the organisation to be managed" or "as if we don't matter".

Employees wanted to give more to their companies and their jobs but also wanted a clearer picture of what was in it for them, the survey suggested.

More than three out of four said they loved or liked their job and their organisation.

In addition, 83 per cent "look for opportunities to develop new knowledge or skills" and 84 per cent "enjoy challenging work that will allow them to learn new skills".

Yet at the same time, just over a third agreed they had excellent career opportunities and more than two-thirds said they were sometimes or frequently frustrated by their organisation's people-related decisions.

And while more than two thirds agreed their organisation had a reputation for financial stability, only half agreed it had a reputation as a great place to work.

"At the end of the day," said Gebauer, "our study paints a picture of a workforce that is energetic, ambitious and committed to working hard and giving its best. This lays to rest several persistent stereotypes: that employees are loyal only to themselves and their careers and are looking to do the minimum to get by.

"But turning people's energy and ambition into engagement – and ultimately into significant performance lift – demands attention, focus and some very different behaviours from senior leaders, as well as clear follow-through on a number of organisational practices.

"The challenge for senior management is to recognize the value of employees' untapped potential and to channel it in ways that yield real improvements in business performance," she concluded.