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CCH® HR MANAGEMENT - 03/17/10

Study reveals employee engagement remained stable during the recession

Since the recession began (12/07), the Bureau of Labor Statistics reports the U.S. economy has lost more than 8.4 million net jobs, unemployment has risen about 200 percent, job openings have fallen 33 percent, hiring has dropped 19 percent, and people are spending more than 3.5 times longer on the unemployment rolls.

And a new Sirota study shows that this economic environment has had a profound impact on employees. An analysis of survey data from over 3 years, across 23-30 companies and roughly 800,000 employees, shows that many still feel positively about their companies, but an increasing number are emotionally and physically exhausted.

Engagement remains stable. Yet, the sense of engagement among those still employed has remained relatively constant across companies throughout the recession (measured by the average percent responding favorably to survey questions assessing: overall satisfaction, pride, willingness to stay if offered similar pay/benefits elsewhere, willingness to recommend the company, and willingness to perform above expectations).

• In 2007, employee engagement levels were at 79 percent.

• In 2008, employee engagement levels remained steady at 79 percent.

• In 2009, employee engagement levels were relatively unchanged at 78 percent.

Important attitudes have improved. Since the beginning of the recession, perceptions of Management Communications, Problem-Solving, Teamwork, Favoritism and Mutual Respect for Others have actually become more positive for many employees (as measured by the change in percent responding favorably).

• Management Communication—Downward communications from management up 13 percent.

• Problem-Solving—Willingness to confront problems up 9 percent.

• Teamwork—Local, within unit teamwork up 8 (percent); Cross-functional teamwork up 7 percent.

• Favoritism—Perceptions of favoritism declined (i.e., improved) 11 percent.

• Mutual Respect—People accept a variety of Ideas, perspectives and working styles up 9 percent.

Anxiety and frustration levels are on the rise. However, since the beginning of the recession, stress and anxiety, insecurity and other frustrations are present for many employees—including, somewhat alarmingly, a more negative view of leaders and managers today (as measured by a decrease in the percent responding favorably or increases in the percent responding unfavorably).

• Increased stress, insecurity and anxiety—Perceived workload up 15 percent; Planning to stay 5+ years down 10 percent; Perceived job security down 7 percent.

• A poorer view of senior leaders—Actions consistent with words down 9 percent; Confidence in future down 4 percent.

• A poorer view of Immediate Supervision's interest in them—Acts as mentor/coach down 13 percent; Interested in my ideas down 8 percent.

• More frustration with performance—Perceived product quality down 10 percent.

• More concern about the long-term "attraction" of the company—Opportunity for career development down 6 percent; Satisfaction with benefits down 5 percent.

These results suggest that as the "Great Recession" comes to an end, organizations need to fully understand this odd new mix of emotions at play among the surviving employees.

"Employees may in fact be less secure, more critical of management's performance, perceive fewer opportunities and feel overworked (especially true in those companies that cut large amounts of employees). But the difficult environment also appears to have caused many in management to communicate better and be more open to solving problems", says Douglas Klein, President of Sirota Survey Intelligence. "Conditions may have caused employees to work more collaboratively and be more respectful of one another. A more communicative management may have created more transparency—hence, perhaps, the declines in Favoritism."

So, in the end, employees might be saying, "Despite this lousy economy (and the effects it has had on me directly and indirectly), I still have a job and this is still a good company to work for."

"However, the declines in specific employee attitudes are causes for concern. For many organizations, 2010 will represent a frugal future. Growth will come, but slowly, and a key element important to that growth will be an aggressive people agenda that values employees despite continued restrained spending," says Klein. "And while not all industries, regions, demographics and occupations are experiencing the net stress of this recession identically; our research suggests that there are specific steps all companies can be taking to mitigate the short- and long-term negative effects of this recession on both their workforce and their bottom-lines. "Management should focus their efforts initially in 5 specific areas."

1. Address issues of employee morale, anxiety and frustration. A recession such as this may have permanently changed the way your employees see your company and their willingness to stay long-term.

2. Assess and address the stress levels of your Front-line leaders. Sirota research has shown that leader stress affects employee attitudes and performance

3. Pay attention to your hi-potential employees. They are often the most critical during difficult times and they can easily find employment elsewhere—even in a tough job market or during recessions.

4. Assess your labor-relations position. Hourly or wage employees will seek outside resources to reduce feelings of powerlessness, insecurity and/or unfairness if management doesn't take steps to do so.

5. Track your "employee withdrawal" statistics such as lateness and sick days. Don't be fooled by lower than normal turnover during an economic period where hiring is depressed as an indication of employee complacency or satisfaction.

Source: Sirota Survey Intelligence; www.sirota.com.

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