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Downturn Puts New Emphasis on Engagement

July 21, 2009
Related Topics: Career Development, Global Business Issues, Motivating Employees, Employee Career Development, Latest News

Employee engagement is fast becoming a crucial business issue as employers face signs of continued economic trouble.

Experts say worker commitment to firms has never been more important. Yet there is evidence it is flagging even as organizations confront the prospect of more belt-tightening.

The good news is that companies can increase esprit de corps with some inexpensive steps, says Jim Harter, chief scientist for polling firm Gallup’s workplace management and well-being practice.

In the wake of tumultuous corporate restructurings, one key tactic is to clarify each worker’s role.

Another, Harter says, is to create hope by helping employees see how they play a role in improving the company’s situation during the downturn.

“They can either feel victimized or they can feel a part of making a difference,” Harter says.

Employee engagement refers to the level of commitment workers make to their employer, seen in their willingness to stay at the firm and to go beyond the call of duty.

Organizations including consulting firm Towers Perrin have found a link between engagement and business results. Companies hoping to emerge from this recession ahead of the pack ought to pay close attention to employee attitudes, argues Julie Gebauer, managing director at Towers Perrin.

“Focusing on the things that drive engagement right now is critically important,” she says.

Human resources executives agree.

A recent report from the Corporate Executive Board research group found that 80 percent of global heads of HR surveyed named engaging employees a high priority for 2009.

But employers also have to focus on costs and their bottom line. And the business climate is none too sunny.

U.S. job losses in June were worse than those in May, reversing several months of improving declines.

And in early July, the International Monetary Fund said the global economy was beginning to pull out of a recession, but “the recovery is expected to be sluggish.”

Towers Perrin found that employee engagement globally held steady between the fourth quarter of 2007 and the first quarter of this year. But Gallup found a slight drop in engagement among U.S. workers between July 2008 and March 2009.

And the Corporate Executive Board found that the percentage of employees globally displaying high levels of discretionary effort dropped sharply between 2005 and the first quarter of 2009.

The board concluded that the decline in employee engagement is decreasing overall productivity by 3 to 5 percent.

Brian Kropp, practice manager at the board, agrees with Gallup’s Harter that one problem is significant role confusion these days for employees.

Another key, according to the board, is bolstering workers’ emotional commitment to their organization through such steps as opportunities for two-way exchanges between business leaders and employees.

Gallup has found that organizations with a layoff or downsizing saw the level of actively disengaged employees rise by 3 percentage points, to 24 percent.

 If a company decides it must cut positions, it needs to explain the reasons to employees, says Gebauer.

“They care about whether management has considered alternatives,” she says.

—Ed Frauenheim

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