Employee engagement

Why Did Employee Engagement Dip to its Lowest Point in 8 Years?

Despite all the hype about the value companies place on employee engagement, apparently their employees didn’t receive the memo.

The Quantum 2015 Employee Engagement Trends Report disclosed that employee engagement is at its lowest point in eight years, despite the positive economic climate.

Only 65.9% of employees in Best Places to Work companies reported being engaged in 2014. This comprehensive study, in which 440,000 employees in 5,500 companies responded, provides a reliable barometer of employee engagement across all industries and company sizes.

Quantum Workplace says engaged employees exhibit these traits:

Quantum 2015 Employee Engagement Trends ReportThose new to the workforce report the highest level of engagement. They are usually the employees who are enrolled in professional development courses at the beginning of their careers. Yet, the study found that after a few years employee engagement declined significantly.

Middle-tenured employees from three to nine years were the most uncertain they were valued, compared to the least and most tenured employees. The study doesn’t delve into why.

But based on my years of experience in the corporate world a good guess is that they realized that the leadership places more value on short-term profits and reducing headcount to make their numbers. This sounds harsh, but when is it right to deny everyone in the company a raise when earnings are soft?

Should the employees who brought in the business, or worked behind the scenes to retain customers, be penalized for the shortcomings of the employees who didn’t pull their weight? Should the best-performing employees have their income capped by arbitrary grade levels?

High Engagement Levels

Not surprisingly, more than 90% of executive-level employees reported they were engaged compared to 59% of hourly employees. Why not? They earn more and enjoy the perks of leadership: company cars, large bonuses, and a pleasant working environment.

They also enjoyed their jobs more, which improved their level of engagement. However, job satisfaction didn’t even make into the top 10 for hourly employees, those who work on the factory floor or in low-level administrative positions.

The study disclosed that Human Resources, Sales, and Marketing employees were the most engaged. Human Resources was the only department that saw an increase in satisfaction, by less than a percentage point.

Note that HR and Marketing are staff positions that incur what’s called “below the line” costs that directly impact a company’s profits. They spend money. They don’t bring it in.

This was one of the more illuminating findings for me. It may be that after all these years HR and marketing people are finally being accepted and valued for their contributions. “I find my job interesting and challenging,” was the number one engagement driver for marketers. That made my heart sing!

When I worked for public companies, HR and marketing were the first departments to have their budgets and headcounts slashed when the company needed to cut expenses. I know, speaking from experience.

Leadership Drives Engagement

When analyzing engagement drivers by department, according to the study, two items made each employee group’s top five drivers of engagement:

  • The leaders of this organization are committed to making it a great place to work
  • I trust the leaders of this organization to set the right course

Employees are more likely to be engaged when they trust their leaders to steer the organization to success and create an environment where employees have the opportunity to prosper.

The study didn’t mention communication as one of the top drivers of employee engagement. Maybe it wasn’t included as a question in the study. Or, maybe Quantum didn’t feel it was important enough to report in the study findings. That would be a real shame.

Leaders who aren’t in continuous communication with employees about the direction of the company are setting themselves up for failure. Employees who are the left in the dark are less likely to be engaged and productive employees. It’s a real morale killer to learn about a new product or a merger on the nightly news.

Employees aren’t afraid of bad news. They lose confidence in their companies and are less engaged when they don’t hear any news. Could it be that lack of communication is behind the nosedive in employee engagement?

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Comments

  1. Jeannette — always fabulous insights on your part. With respect to why senior managers feel more engaged, I would add a few things: 1) Cognitive dissonance — they can’t not say they’re engaged; 2) They are in the mix of things and can affect change; and 3) They work to find value and meaning in what they do, and have the level/means to do so.

    Frank

    • Frank — thanks for adding to the conversation. Good point: it would be awkward for senior leadership to say they aren’t engaged in the company they’re running!

  2. It’s interesting to look at what causes employee engagement and who feels engaged. I certainly agree that leadership drives engagement. People need to trust their leaders and also feel as if their own contributions are valued. The employee’s future is tied into the company’s future.

    • Donna — that’s why employee engagement is so important. Employees want to help their companies to succeed, because if the company is successful the employees will have many more opportunities for growth.

  3. Hi Jeannette, well parts of this certainly aren’t surprising. For instance it is no shocker that the high paid execs with their company cars and expense accounts are much more engaged in their jobs than those hourly employees who feel like they aren’t valued at all at the company, that their opinions don’t matter and are made to feel they could easily be replaced. Engagement does comes from the top down. Leadership is able to keep those employees engaged by their actions, but they have to be committed to their role as “leader” earning the trust of their team members. That comes by keeping them involved in the company, both ups and downs.

    • Susan — I can tell you’re another refugee from the corporate world, like me. Why don’t companies value their employees more? If only and management kept employees informed and motivated, great things would happen. Sigh….

  4. Jeannette, I totally agree that communication is key but I wonder if downsizing hasn’t contributed to less communication. I’ve been out of the workforce now for 15 years so am not totally knowledgeable about what is going on today. I do hear about employees being let go and those employees that are left having to pick up their workload along with their own. This may mean there isn’t time for good communication – things now get communicated by quick emails which isn’t anywhere near the same. Just a thought.

    • Lenie — I agree with your observation. Not only are employees let go they are marched out of the office like criminals. I’ve seen it. It’s beyond demoralizing to the employees who are left wondering if they are next.

  5. When it comes to management being more engaged than hourly workers, I think it is attitude. We have seen so many companies sold, or driven into bankruptcy. What happens? Higher management gets a huge bonus, with a parachute, and the workers are left looking for another job. No wonder the workers do not believe in their companies anymore. You (workers) give years to a company, but the management is more concerned about how high the stock is (because they are given stocks) then they are concerned if the company is viable and can survive and you continue to have a job.
    This is why no one cares about their jobs anymore, why bother if the management is more concerned about their personal welfare, then that of the company. Workers are less concerned about the direction of the company, then they are if the company is going to be there for them in couple years.

    • William — so sad but so much of what you’re saying is true. When bankers who caused the financial meltdown of 2008 through their greed receive no punishment, are bailed out by the government and then award themselves bonuses, you sometimes wonder if the world has gone mad. Makes no sense and the little guys get nothing.

  6. Absolutely germane is that employees are NOT afraid of bad news! I think management can sometimes be afraid to share some bad news in that they assume folks will jump ship. In fact, they might become more engaged in making things better if motivated properly!

    • Jacquie — I agree wholeheartedly. Employees want to succeed. When things go bad, they want to help right the ship if only they’re given the chance. Instead, they worry about losing their jobs. Sad.

  7. Interesting study, Jeannette! Based on my previous life as an HR Manager, I would agree with everything here, especially your last point. People aren’t as negatively affected by bad news as they are by no news. Communicate, people!

    • Thanks, Meredith, for your observations. You should know. Come on, top leadership, communicate with the troops!

  8. I would be curious what the employee engagement statistics look like for teachers. It’s hard to love one’s job when the duties just keep piling up and pay is often decreased on hard financial years for the district. Teachers are gluttons for punishment is the conclusion I had to come to. All I ever wanted was to do my job well, but the system really is rigged and needs an overhaul. It’s too bad though because being around students everyday is such a gift, it’s the rest the environment that needs some re-thinking.

    • Jeri — That’s so sad. As Henry Adams famously said, “A teacher affects eternity; he can never tell where his influence stops.” I can think of three teachers, in particular, who had a profound influence on my life to this day.

  9. Such good points and thinking back over my favorite jobs back when I was in the corporate world the leaders are the ones who made the difference – for better or worse. The one that ranks at the very top was a resort here in Maui and the employee engagement was off the charts because of the amazing culture the general manager fostered. It sounds so cliche these days but we really were a family. The only reason I left was for a career opportunity that I just couldn’t pass up but for nearly a week before I resigned everything made me tear up just thinking about having to leave! The good thing though was that the new job had me overseeing a department of 35 employees so I took the excellent training I received with me and shared the love. 🙂

    • Marquita — aren’t you lucky to have had that great experience with your former company. And that caring environment helped you to flourish and grow in your career.

  10. Jeannette- I have always felt it is the unknown that scares people than the known. If it is bad news the employees need to know. When the market crashed in 2008 I told my employees that I may have to close the business down. The responses I got were overwhelming. Most of them said they would be there for me until the bitter end. I must be doing something right

    • Arleen — You are doing something right. Telling your employees the truth empowered them to do whatever they could to help the company stay in business. I’m so glad that you survived and are thriving!

  11. Since I am late to the party Jeannette most of what I would like to add has been added already. That said, I will not let that stop me :). I have read several articles regarding the things that motivate an employee and surprisingly money is not one of them. We are a simple folk and things like appreciation and being kept in the loop and not treated like dummies goes a long way to build loyalty.

    • Tim, you are so right. Of course, compensation is important but so is our dignity. Treat us like adults, respect our abilities and you will find that we’ll do everything to help the company reach its goals.

  12. Employers who trust their employees enough to share the bad as well as the good news and who also communicate with them regularly are the most likely to inspire workers to help improve the company’s services. People really appreciate being listened to and being told what’s going on.

    • Beth — I agree that employees want to know the bad news as well as the good. They know their companies will go through good times and bad but they can weather the bad times better if leadership will only let them in on the news and empower them to help.