Global Employee Engagement Rebounds from Recession Years

Career advancement, rewards and employer brand top engagement drivers

By Roy Maurer Nov 24, 2014

Research shows that employee engagement levels and employees’ perceptions of their overall work experience increased in 2013, with the largest engagement increases found in the Africa-Middle East region.

Aon Hewitt’s 2014 Trends in Global Employee Engagement study, which represents the perspectives of 7 million employees across more than 6,000 companies in 155 countries, indicates that employee engagement levels increased to 61 percent in 2013, up 1 percentage point from 2012 and three percentage points from 2011. Perceptions of certain areas such as safety and benefits have improved, while other areas like business leadership, innovation and the employee value proposition have fallen.

“Our study shows that organizations overcoming business and people challenges are investing in a culture of engagement built on performance focus, strong reputation and superior leadership. These investments are resulting in stronger company performance,” said Ken Oehler, Aon Hewitt’s global engagement practice leader.

Engagement Levels by Region

Global employee engagement continues to rebound since the lows of 2010. Broken down by region:

  • North America increased 2 percentage points to 65 percent, mostly driven by a 4-percentage-point increase in the United States, while Canadian levels fell 1 percentage point.
  • Asia-Pacific increased 3 percentage points to 61 percent. A notable exception was Japan, with the significantly low engagement score of 34 percent.
  • Latin America fell 4 percentage points to 70 percent.
  • European levels stayed flat at 57 percent. Levels in Eastern Europe fell, but were offset by engagement improvement in Western and Central Europe.
  • The Africa-Middle East region improved 8 percentage points, from 53 percent to 61 percent.

The Africa-Middle East region’s engagement has “shown some volatility in previous years, but appears to have jumped significantly [in 2013], perhaps due to some economic tailwinds. This region, and particularly sub-Saharan Africa, are forecasted to grow,” said Oehler.

Work Experience by Region

Aon Hewitt surveyed workers’ perceptions of their work experience using several “foundational elements” consisting of company communication practices, policies, infrastructure, job security, benefits and the work itself. They were also surveyed on perceptions of employer brand and reputation, leadership and performance.

The largest improvements were found in organizational reputation, safety, diversity and benefits. A slight deterioration was reported in the perceptions of business leadership, company practices regarding innovation, communication and customer focus, and the employee value proposition or degree to which the external brand is aligned with the internal brand promise to employees.

Africa and the Middle East collectively saw an average of 22 percentage points’ improvement in positive perception scores in areas such as people focus, diversity, safety and employer brand, with no areas deteriorating.

Asia-Pacific experienced some of the largest positive swings in China, Japan, Australia and New Zealand, with the region falling only in customer focus, communication and leadership.

Perceptions about work were trending downward in Eastern Europe and Latin America, especially in areas like leadership, brand alignment and performance management.

Mature markets in North America and Western Europe are generally improving at higher rates across work experience areas than they are decreasing.

Engagement Drivers

As in past years, career opportunities ranked as the highest driver of engagement worldwide. Three of the top engagement drivers—performance management, organizational reputation and pay—improved, while communication fell.

Pay’s continued increase in perception can be attributable to many factors, according to the report. “Pay freezes could be hitting a … threshold in contracting markets. Pay could also be increasing in importance due to talent competition in the emerging markets of Asia-Pacific and Latin America. Also, with more and more employers focusing on ‘pay-for-performance’ strategies, and thus forcing more variation in reward levels, there could be more variability in pay that is better aligned with engagement and performance output,” said Oehler. “All of these possible reasons point to a shifting employment contract where getting pay right is not just a price of entry, but critical to motivate the best performance.”

Innovation, a top engagement driver in Europe, improved 1 percentage point in that region despite falling globally by 2 percentage points. Recognition improved globally in Asia-Pacific and North America, but fell 5 points in Latin America.

Millennials Least Engaged

The report’s generational engagement levels should be a cause for concern, as exiting Baby Boomers reported the highest levels of engagement (66 percent) and entering Millennials the lowest (56 percent). The sandwiched Generation X fell in between at 60 percent.

Innovation and pay emerged as differentiating engagement drivers for Millennials compared to other generations. Generation X employees are unique in that recognition is a top engagement driver.

“Universally, employees want to be part of an organization that offers career opportunities, provides rewards for performance and has a solid reputation. However, there is no one-size-fits-all solution,” said Oehler. “Understanding your employees and what drives them, and subsequently tailoring your communication to resonate best with respective groups, will pay dividends in making engagement happen.”

Leadership Most Engaged

Engagement levels continue to vary by job level. Executives and senior managers remain the most engaged, with 75 percent engagement globally. This group also saw the largest increase in engagement over last year with an increase of 9 percentage points. Notably, these senior leaders are engaged by different things than the average employee is—most notably, by a people-focused culture and by their senior leadership peers.

Professional employees such as engineers and lawyers reported the lowest levels of engagement across all levels, at 54 percent. These employees require a package of development, rewards and recognition, according to the findings.

Middle managers and frontline employees saw slight increases to 65 percent and 61 percent respectively.

Make Engagement Happen

To better engage talent, Aon Hewitt recommended:

Understanding talent trends. Employee demographics will have a big impact both in terms of where available talent will be around the globe, and also in terms of how large population segments like Millennials and Baby Boomers are changing the expectations workers have of their companies.

Focus on the right behaviors. Organizations must clearly define for employees what engagement looks like. “For many employers, there is an increasing need for agility, flexibility, speed, and an ability to learn and adapt,” said Oehler. “Organizations can further encourage behaviors that signify engagement by aligning performance management, learning and development, and rewards and recognition with their expectations for success.”

Deliver a compelling employee value proposition. According to the report, there is a growing disconnect between what companies require, what they are offering and what employees expect in return. “Companies that deliver on their [employee value proposition] are more likely to have employees who speak positively about their organization, more likely to retain people, and more likely to cultivate an environment of employees who aim for excellence,” said Oehler.

Create a culture of engagement. To build a culture of engagement, organizations first must understand the composition of their workforce and build tailored programs that motivate and inspire the unique makeup of their employee base. “Employers often find that there are basic elements of their HR programs, such as benefits, safety and work/life balance, that may be key drivers inhibiting engagement,” said Oehler.

Cultivate engaging leaders. Leadership makes the critical decisions on the key factors within an organization that impact employee engagement, such as performance goals, pay and recognition, as well as work process and innovation. “Leaders’ decisions can effectively drive or hinder engagement. Leaders who seize the opportunity to engage themselves, engage others, and holistically drive a culture of brand, reputation, performance and engagement will help their teams and organizations achieve better business outcomes,” said Oehler.

Roy Maurer is an online editor/manager for SHRM.

Follow him at @SHRMRoy

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