One in three workers disengaged: what can you do?

Analysis

One in three workers disengaged: what can you do?

Employee engagement in Australia has improved for the first time in three years, but we still lag behind our global counterparts.

Employee engagement levels in Australia have improved for the first time in three years, but the overall rate is still slightly below the global average. This is despite the average falling over the past year, according to a survey of engagement levels in five global regions.
 
The 2017 Trends in Global Employee Engagement Study, published by management consultants Aon Hewitt, surveyed about 1000 organisations in more than 60 industries. Perhaps its most significant finding is that the relative importance of several factors that influence engagement has changed quite significantly. This isn’t obvious at first, because the overall rating scores haven’t changed much.

How are highly engaged employees identified?


The report defines employee engagement as the level of an employee’s psychological investment in his/her organisation.

Highly engaged employees display the following characteristics:
  • They say positive things about their organisation and act as advocates for it.
  • They intend to stay with the organisation for a long time.
  • They are motivated to strive to make their best efforts towards making the organisation successful.

Overall results: about two-thirds engaged


Globally, the percentage of employees regarded as being highly or moderately engaged fell from a historically high 65% in 2015 to 63% in 2016. The 63% comprised 24% who were highly engaged and 39% who were moderately engaged. This is still ahead of all other years since the survey commenced in 2009.

The report attributes the fall in 2016 to “populist” political developments overseas, claiming that they have led to wider discussions about “borders” and “walls” that have made employees feel more anxious, and which are likely to impede the flow of labour.

Technology advances, such as driverless cars, drones and virtual reality are also perceived as a threat to jobs. 

For the three characteristics of high engagement listed above, “saying positive things” scored 68%, “intending to stay” scored 59% and “being motivated to strive” scored 63%. In all three cases, these figures were down 1% compared to 2015.

Australia recorded an overall engagement score of 61%. Although still slightly less than the global average, it moved against the global trend by improving by 3% over 2015. 

Of the 37% of employees globally who were not engaged, 22% were passively disengaged and 15% were actively disengaged.

Regional trends


Although the overall score may look little different from the previous year, there were significant fluctuations within different regions. Scores for each region were:
  • North America 64% (down 1%)
  • Latin America 75% (up 3%)
  • Africa 61% (up 2%)
  • Europe 58% (down 2%)
  • Asia-Pacific (which includes Australia) 62% (down 3%)
The report contains summaries of the trends in each region.

What are the main opportunities to improve engagement?


Globally, the five most important areas that provide opportunities to improve engagement are:
  1. rewards and recognition
  2. the employment value proposition (EVP)
  3. quality of senior leadership
  4. career opportunities
  5. enabling infrastructure
Of the above, the score for the EVP improved by 1% in 2016, but scores for all the others fell, most notably career opportunities (down by 5%).

For Australia only, diversity and inclusion was considered to be the most important single driver of engagement, scoring 73%.

The report commented that remuneration, fairness and trust were three factors that were taking increasing priority as influencers of engagement.

Comments on trends: “conventional wisdom upended”


The report’s authors commented that the findings in relation to the biggest opportunities to improve engagement “fly in the face of conventional wisdom”.  This suggests that both the actual at-work experiences of employees and their expectations have changed. 

Most previous studies of engagement found that the line manager/employee relationship provided the most significant opportunity for improvement, but rewards and recognition came out as number one in this survey, up from No. 3 in 2015. (Author’s comment: this is significant when one considers that remuneration surveys and earnings statistics in Australia have shown low rates of pay increases for several years now.)

A more turbulent global environment (eg politics) is providing greater perceived threats to employees’ basic needs for fairness, belonging, trust, advancement and support. The report identified 'providing fairness in pay' as the strongest opportunity of all to improve engagement, which means being able to identify and understand both real and perceived gaps in remuneration. Greater pressures for transparency with pay are a likely byproduct as well. 

Another interesting trend is that employees’ expectations of senior managers in their organisations are increasing, even though the impact of immediate managers on engagement is not. 

The EVP is also increasing in importance as providing a compelling reason to work for an organisation. It needs to be considered separately from an organisation’s reputation and corporate social responsibility, which are less influential.

Although providing enabling infrastructure rates 5th, its importance has declined significantly over the past year.

Relevance of report


The main value of this report is not the “scores” it reports but the trends in influencers of engagement that it has identified. It appears that the issues of remuneration, fairness, transparency and trust are having a greater influence than before, and employees are placing greater expectations on senior managers (instead of their own line managers) to deliver on those issues.

So even though overall engagement scores are remaining relatively stable, the importance of the various factors that influence them appears to be shifting.

Australian employees’ overall engagement scores have moved closer to the global average, being 2% below average in 2016 compared to 7% below in 2015. This is because of both an improvement in the Australian score and a decline in the global score. Reading between the lines, less turbulent economic and political environments may be among the main reasons why, as local remuneration surveys have continued to show little movement in pay rates.

Organisations that wish to use surveys such as this one for benchmarking or comparison purposes need to study carefully the definitions and methodology it used, and follow the same approach when taking their own measurements. Otherwise, an “engagement score” of say 50% or 80% will not be a valid comparison. However, the overall finding that about 37% of employees are either passively or actively disengaged is broadly in line with what other surveys have concluded.

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