Recession Alters Relationship Between Employers, Workers

By Kathy Gurchiek Mar 17, 2010
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The recession has made dramatic changes in the basic social contract between employee and employer and has affected how employees view their work and leaders, according to a global study of more than 20,000 workers.

The findings, released March 16, 2010, in the Global Workforce Study, are from a biennial Towers Watson survey of employee attitudes and workplace trends conducted in November and December 2009 in the U.S. Outside the U.S., the survey continued into January 2010.

Overall, participants were in 22 countries or markets—Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Korea, Malaysia, Mexico, the Netherlands, Russia, Singapore, Spain, Switzerland, the United Kingdom and United States.

Among the nearly 1,100 U.S. employees surveyed, job security is taking precedence over on-the-job advancement, and the recession has prompted workers to lower their career and retirement expectations severely, the survey found. Stability is “paramount,” according to the report, “even at the expense of career growth and development.”

“Not only have people seen many co-workers, friends and family members laid off, but they know they are increasingly on their own for everything from health care, to managing their career, to planning for a secure retirement,” said Max Caldwell, a leader in the company’s talent and rewards business, in a news release. This represents a profound shift for employees and employers alike.

Among the findings for U.S. workers:

  • 40 percent said working for two or three organizations throughout their career is the most appealing career model.
  • 39 percent would prefer to be employed at one organization their entire work life.
  • 20 percent prefer changing organizations whenever a better opportunity arises.

In addition, the study found that:

  • 56 percent of U.S. workers think that the availability of jobs will not change significantly over the next 12 months.
  • 28 percent said there will be significantly fewer jobs available in the next 12 months.
  • 15 percent said there will be significantly more jobs available in the next 12 months.

Globally, 78 percent of workers think that the job market will stay the same or worsen over the next 12 months.

Free-Agent Nation Backlash

Most U.S. workers want stability in an unsecure employment environment and chose “secure and stable position” over “substantially higher levels of compensation” when asked which factors were most important in a work situation (86 percent vs. 74 percent, respectively). However, just slightly more than half think that security and stability is achievable at their organization; only 22 percent think that significantly higher pay at their organization is achievable.

“People really do want to burrow in at the very time when employment has become much more contingent [on] … ‘if we can afford you, if the demand is there, and you continue to perform well then we want you here,’ ” Caldwell told SHRM Online. “People have this instinct they want to hang onto their organization at the same time employers have demonstrated … that the fundamental contract is different.”

In fact, while 43 percent of U.S. workers think that they have to leave their organization to advance in their career, nearly the same percentage (44 percent) has no plans to leave.

This burrowing instinct is not universal, Caldwell said, pointing to emerging economies, such as China and India. In India, for example, 44 percent of workers said they would follow the better employment opportunity. Job prospects are brighter in those countries, according to the report, which notes that retention there could fast become a concern.

“You do see people ready to be more mobile,” Caldwell said.

In general, though, this willingness to stall career growth for stability is not limited to U.S. workers—81 percent of all workers are not actively looking for a new job and more than three-fourths place job security above everything else, including more pay.

It’s what Towers Watson calls a “backlash against free-agent nation.”

“Employees may be settling in for the long haul, perhaps staying with an employer for decades,” the report found, representing a change for employers who have been talking about the “war for talent.”

It’s a different kind of war than what HR professionals and others have been talking about, Caldwell said, voicing his concern “that organizations are gearing up to fight the wrong war.”

Instead of a war to attract top talent, he said organizations should be waging a war to hold on to critical talent.

“People are tired; they are holding onto the organization in a sense because they feel risk averse. You have this recipe for a sort of stagnation and lack of motivation, and that to us is the new war on talent.”

The challenge is to engage and motivate this large group of people who are recession fatigued, he pointed out. Organizations need to create self-reliance among employees to have them take charge of their retirement and health benefits, and personal wellness, enhancing skills and advancement, he added.

“Security really comes from your own individual ability to manage all those things, certainly with help from the organization. We don’t think organizations are being explicit about this … and people aren’t feeling as well-equipped to be self-reliant.”

However, many are not confident that they have the ability and knowledge to handle this role, the report notes. Globally, three-fourths of employees surveyed feel the responsibility for providing for their financial future, but only about half say they are very comfortable doing so.

And 51 percent feel that they will be responsible primarily for providing for their health care needs in the next five years, but only 38 percent expect to feel comfortable doing so once they reach retirement. In the U.S., the average expected age of retirement is 67; that’s five years later than the expected retirement age elsewhere around the world.

It’s up to employers, Caldwell said, to equip employees with the tools and training they need to manage benefits such as their retirement savings.

Advancement Stalls, but Workers Stay

Nearly three-fourths of U.S. workers defined advancement as making more money; 51 percent said it was acquiring skills to be eligible for other jobs; 50 percent defined it as acquiring skills to perform better; 46 percent said it was about achieving higher status or recognition; and 35 percent saw it as moving up a well-defined career path.

Advancement most likely comes by leaving their organization, 43 percent of U.S. workers said. The reasons heard most often: There is no clear path for advancement in their current job, and a streamlined structure reduces advancement opportunities.

Employers can provide intellectual advancement even if their budget for professional development has shrunk, Caldwell noted. However, he emphasized employee self-reliance here as well, including finding ways to learn skills or enhance current ones.

In fact, close to half of all workers surveyed believe that the results they deliver are the most important factor in advancing in their organization, although one-third said knowing the right people helps. Slightly more than half of workers think that networking would help them manage their careers better and that a professional mentor would be a valuable resource.


The survey found that employees are putting more emphasis on senior leaders’ interpersonal skills than on business and financial acumen; they want leaders who connect with them emotionally.

Attributes they want most in senior leaders:

  • Trustworthiness—79 percent, U.S. respondents; 64 percent all respondents.
  • Cares about others’ well being—67 percent; 55 percent.
  • Encourages development of talent in the organization—56 percent; 51 percent.
  • Highly visible to employees—42 percent; 44 percent.
  • Manages financial performance successfully—42 percent; global data not available.

There was a fairly sizeable gap, though, between what they want in a leader and what they perceive about their leaders—only 47 percent said their senior leaders are trustworthy, and 38 percent agree that senior leaders have a sincere interest in employee satisfaction and well-being.

Kathy Gurchiek is associate editor for HR News. She can be reached at

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