Employees Staying Put—For Now

By Rebecca R. Hastings, SPHR Jun 9, 2009
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Reports show that the vast majority of employees are generally satisfied with their employment situation—even in the midst of a global economic downturn—and plan to stay with their employer. But when the economy improves, those who are dissatisfied are more likely to seek other opportunities.

Seventy-one percent of employees are not seriously considering leaving their current job, and 64 percent said it would take a lot for them to look for another employer, according to Towers Perrin’s Workplace Watch report released May 27, 2009. These are the highest percentages recorded for these two questions over the 18 months’ worth of data reflected in the report.

The professional services firm’s inaugural report, containing responses from 668,000 employees working at 42 companies worldwide,compares data for the first quarter of 2009 with the five preceding quarters to evaluate how the economic downturn is affecting employees’ attitudes about work.

Though many employees appear to be satisfied with their employers, there’s another way to look at the data.

“While our data confirm people are less inclined to switch jobs right now, it’s important to turn those statistics around and remember that 29 percent of employees are still open to moving elsewhere,” said Julie Gebauer, managing director of Towers Perrin, in a statement. These individuals could be the first ones out the door when the job market improves, she added.

This could pose a serious risk to employers if those who leave are “A-players” and/or employees in critical roles, according to Gebauer: “Smart employers will want to get ahead of the upswing in the employment trend, so when it comes back fully they’re not watching a revolving door of talent.”

A Closer Look

The report contains comparative data on 15 questions related to employee satisfaction and engagement. Though first-quarter 2009 responses to most of the questions show a slight uptick in favorability over the previous quarter, responses to five of the questions show a marked drop.

For example, just 50 percent of employees responded favorably when asked how good top management is at providing leadership, down from a high of 57 percent in the fourth quarter of 2008. And just 63 percent said management provides a clear sense of direction, down 8 percentage points from the previous quarter.

Employees expressed declining satisfaction in their ability to balance work and family responsibilities; just 55 percent responded favorably to that question, down 7 percentage points from the previous quarter.

Respondents’ results declined the most when asked if they had a clear understanding of the goals and objectives of their division (a 12 percentage point drop) and the company as a whole (a 10 percentage point drop), though the figures were otherwise reasonably high at 71 percent and 69 percent favorability, respectively.

“These trends are disconcerting and represent a wake-up call for leaders,” said Max Caldwell, managing principal of Towers Perrin, in a statement. “Positive perceptions of overall leadership effectiveness¾a critical driver of engagement¾are down. While the results of our analysis indicate that leaders have stepped up to the challenge of communicating more and being more visible during this period of crisis, our findings also suggest leaders could be losing sight of the long-term vision and purpose that remains essential in encouraging and energizing the workforce.”

Positive Results

Though there is room for improvement, Towers Perrin reports that favorable scores rose slightly on a number of items which contribute to engagement.

For example, almost three-quarters (74 percent) of employees agree their company’s structure facilitates efficient operations, up from a six-quarter low of 54 percent in the second quarter of 2008. Towers Perrin says this suggests that the latest rounds of restructuring have been conducted thoughtfully and in a manner that doesn’t automatically demand doing more with less.

Two-thirds of respondents say their career paths are reasonably clear (67 percent). A similar number (68 percent) said that long-term career opportunities exist at their company.

And 77 percent agree their company is regarded highly by customers, up from 73 percent the prior year, suggesting that employees recognize the efforts their companies are making to connect with the marketplace during the tough economy.

At the same time, an overwhelming 91 percent understand how their work helps the company achieve its immediate objectives, a view that has held fairly steady over the six quarters studied.

“These results show that many employees ‘get it’ in terms of what the company has to do in the short term to weather the economic downturn,” Gebauer said. “They understand that the recession has required sacrifices, and they’re willing to do what’s needed to help their employer succeed; in part because they want to ensure their own continued employment.”

But she says companies should remain vigilant.

“Complacency about current engagement levels opens a company to significant risk that it will fall behind competitors, both in performance and talent retention, as the economy starts to rebound and it shifts to more of a growth mode, Gebauer cautioned.

A Prescription for Sustaining Engagement

Caldwell says employers need to focus on:

  • Getting leaders out front to talk with employees about the business environment and how the organization is responding to it, as well as the long-term vision and what the organization stands for.
  • Involving employees in efforts to manage costs to help them feel like active contributors.
  • Communicating consistently and candidly about short- and long-term objectives.
  • Listening and gathering input from employees.
  • Promoting development opportunities so people can see a future for themselves that is worth working toward.
Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.
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