Largest Single Study of Workforce Worldwide Shows Engagement Levels Pose Threat to Corporate Performance
Toronto, November 15, 2005 — At a time when companies are focused on growth – and looking to their key talent to achieve that growth – a major new study offers disturbing news: just 14% of the global workforce is fully engaged at work, and less than one in five (only 17%) in Canada.
The study, the largest of its kind today, was conducted by Towers Perrin HR Services in August 2005 and involved more than 85,000 people working for large and mid-sized companies in 16 countries, including over 5,100 Canadians. It shows that companies have a vast reserve of untapped potential in their people, but are failing to create the workplace conditions needed to capture that potential.
�For the first time ever, we�ve given voice to the workforce worldwide,� noted Don Lowman, a Managing Director of Towers Perrin and member of the firm�s Executive Council. �What we�re hearing is that people want to contribute. But they say their leaders and supervisors unintentionally put obstacles in their paths. The insights in this study give management a very clear road map to removing these obstacles and unleashing the full potential of the workforce to deliver superior performance.�
According to the survey, engagement – the measure of employees� willingness to invest discretionary effort at work – ranges dramatically worldwide. The highest recorded levels reached a peak of 40% in the two Latin American countries in the study. The lowest recorded levels are in Asia, with Japan at the bottom of the list with only 2% of it�s workforce highly engaged. Across Europe and North America, engagement levels fall in between.
�With 17% of the workforce highly engaged, Canadians rank fifth worldwide, behind Mexico, Brazil, the U.S. and Belgium� said Kevin Aselstine, Managing Principal for Towers Perrin HR Services in Toronto. �This has implications for our productivity. Canadian organizations are still struggling with managing costs at the same time as they are looking for growth. This study shows what it will take to get employees on board with those goals. Canadians are ready to contribute – if we change the way we manage the workforce.�
�Our last cross-Canada study in 2003 showed a spirit of rational endurance� said Aselstine. �We were in an economic slowdown, and people were realistic about what they could expect from their employers. Now that the economy and the job market are improving, Canadians are looking for the rewards they believe to be commensurate with their performance, including pensions, benefits and pay. They�re also looking for senior management interest in employee well-being, opportunities to learn and improve their skills, and organizations with a reputation as a good employer�.
Engagement makes a difference
High levels of engagement bring measurable benefits. Worldwide, 59% of the highly engaged survey respondents planned to stay with their current employer, compared to just 24% of the disengaged group.
�At a time when retaining talent is considered critical for Canadian employers, it is important to note that engaged employees are far less likely to leave for another job than their peers,� said Michel Tougas, Managing Principal in Montreal. �In fact, in Canada this is even more acute � 63% of Canadians that are highly engaged have no plans to leave their current employer, versus only 12% of the disengaged group. After a few years of slower activity, the job market is heating up, and the best talent has more options than ever before.�
Highly engaged employees also believe they can and do contribute more directly to business results than less engaged employees. For instance, 84% of highly engaged employees believe they can impact the quality of their company�s work product, compared with 31% of the disengaged. Seventy-two percent of the highly engaged believe they can impact customer service, versus 27% of the disengaged. And 68% of the highly engaged believe they can impact costs in their job or unit, versus 19% of the disengaged.
�Canada�s aging workforce, as well as changing business strategies and labour cost structures, are forcing more companies to change the way they think about staffing their business plans,� said Tougas. �More organizations are looking at options like relocating operations, exporting jobs and/or importing workers. This means most employers, not just the huge multinationals, will have to find and manage people in most, if not all, parts of the world. Their success in doing that will depend on their ability to deal with a truly global workforce on a local level.�
While engagement is universal, what influences people is different across countries
The survey shows there is a common set of characteristics that define employee engagement across the globe. These include emotional aspects, like taking pride in working for a company, and rational aspects, like understanding how your job fits into the bigger picture at your company. But how a company establishes these emotional and rational connections with employees differs considerably from country to country.
The study found that engagement is not simply a byproduct of general economic wellbeing, and has little to do with economic conditions in each country. Only 8% of Chinese employees in our survey are highly engaged, despite China�s fast-growth economy. In Germany�s slowing economy, by contrast, almost twice as many employees (15%) are highly engaged.
Little confidence in management�s ability to inspire and lead
The survey also shows that employees don�t have strong confidence in senior management�s ability to inspire and lead. For instance, just 41% think their senior management supports new ideas and new ways of doing things, and only 40% think their senior management acts in a way that�s consistent with their values. Even fewer – just 37% – believe that senior management tries to be visible and accessible to employees. Only 36% think senior management effectively communicates the reasons for important business decisions. And a mere third believe senior management communicates openly and honestly with employees.
�Canadians are somewhat more positive than the average global scores on leadership � but not by much�, said Aselstine. �When it comes to communicating the vision and plans for growth, and involving people in those plans, employees don�t believe today�s leadership is there. Management is not yet stepping up to the plate in creating a work environment that allows people to give their all � despite clear evidence of how important that is.�
About Towers Perrin and HR Services
Towers Perrin is a global professional services firm that helps organizations improve their performance through effective people, risk and financial management. Through its HR Services business, Towers Perrin provides global human resource consulting that helps organizations effectively manage their investment in people. Areas of focus include employee benefits, compensation, communication, change management, employee research and the delivery of HR services. The firm�s other businesses are Reinsurance, which provides reinsurance intermediary services, and Tillinghast, which provides management and actuarial consulting to the financial services industry. Together, these businesses have offices and business partner locations in 25 countries. More information about HR Services is available at www.towersperrin.com/hrservices.
