Recession leaving a trail of insecure employees
The worst of the recession may be over, but its impact on the workforce and employment looks to be deep and long-lasting, according to the results of new research from global professional services company Towers Watson.
The Global Workforce Study a survey of employee attitudes and workplace trends confirms that the recession has fundamentally altered the way employees view their work and leaders, while significantly accelerating changes to the basic social contract that underpins employment in the UK.
In stark contrast to earlier Global Workforce Studies, the 2010 results which covered 20,000 employees from private sector organisations across 22 countries demonstrate employees have dramatically lowered career expectations. Advancement now takes a back seat to a desire for workplace security and stability.
Some 62% said they are willing to put a great deal of effort beyond what is normally expected to help their organisation be successful and only 12% are actively looking for another job. However, only 39% believe their senior leaders are trustworthy and 30% believe their organisations did not treat their employees fairly in the last 12 months.
It is unsurprising that people are motivated to ensure that they and their employers get through difficult economic times successfully, said Nick Tatchell, a senior consultant at Towers Watson. But our survey highlights the disconnect between what people expect from their employers and what employers believe they can reasonably offer.
Cost, risk and responsibility for employees financial security, wellbeing and career development has shifted further to the individual. The Towers Watson survey shows that on a rational level most employees understand this change but they do not feel fully equipped to deal with it.
Cost cutting measures during the recession have had a painful impact on many employees, reminding them they are now increasingly on their own for everything from career planning to financial security, said Nick Tatchell. These results are a reflection of a changing social contract and the related realignment of priorities, expectations and actions.
According to Towers Watson, the results may at the same time represent the final nail in the coffin of the free agent concept hyped as a new approach to work just a decade ago. Eight out of ten employees want to settle into a job, with roughly half saying they want to work for a single company their entire career and the rest wanting to work for no more than three companies.
Employees have become surprisingly traditional in the deal that they want from their employer, with an emphasis placed on security and desire for a stable career with a small number of organisations, said Nick Tatchell. However, other aspects of the current deal have emerged unscathed through the downturn. For instance, two-thirds of employees are comfortable with pay being driven by their personal performance.
The study also highlights how a redefinition of career advancement has become embedded in the UK workplace. It is now more about acquisition of new skills, and less about a traditional progression through the ranks of the organisation. For example, 53% of employees define career advancement as being about acquiring new skills to do their current job better and to make them eligible for other jobs.
Employees were asked about the three most significant barriers to advancing their career within their organisation. The top three were: there are no career advancement opportunities (53%), the organisation has reduced the number of job levels so there is less opportunity of advancement (42%) and it is difficult to identify the opportunities available (37%).
While retaining staff may not be high on many companies agendas currently they would be wrong to ignore the retention issue, said Nick Tatchell. Companies have many frustrated employees who can see no opportunity for advancing their career within the organisation and some of the actions companies took during the economic downturn are likely to have further limited their options. When the jobs market eventually opens up, this pent-up frustration could have significant consequences on morale and performance hindering growth and recovery at the very time it is needed most. Moreover, our research shows that it is high potential employees who are most willing to move employers to advance their careers just the people companies least want to lose.
Unsurprising, given the current economic climate, job security is high on many peoples agendas a secure and stable position is regarded as important by 81% of employees. But other factors are also considered key: 59% want a wide range of jobs and experiences, 58% want the opportunity to rapidly develop their skills and abilities and 56% are looking for substantially higher levels of pay.
As might be expected, age has an influence in the motivations of employees, with workers under 25 more interested in career advancement opportunities and, interestingly, work life balance and flexible work hours. This contrasts with the focus on job security and better pensions for older workers.
Some 12% of people are actively looking for another job, with a further 4% having made plans to do so. But most are currently not looking for another job 46% have no plans to leave while a further 37% are not looking though would consider another offer if one presented itself.
Has the recession bred a new era of company men? asks Nick Tatchell. Where once employers fretted over a War for Talent, they must now plan for a workforce that intends to stay on-board for years perhaps even decades. This log-jam of long-tenured employees will help keep a lid on the dreaded brain drain but may ultimately lead to reduced opportunities and declining morale if not well-managed.
The recent tough times and the current climate of uncertainty have also created a longing for leaders who connect with the workforce. Trustworthiness is rated by employees as the most important attribute of senior business leaders cited by 71% of employees. Next comes care about the well-being of others (62%), being highly visible to employees (56%) and encouraging the development of employees (50%). Yet the roles that most senior leaders would consider to be crucial are not highly rated by employees promoting the brand (22%), positioning the organisation to compete in the global business environment (24%) and keeping a high profile outside the organisation (13%).
Employees appear to want their senior leaders to be focused on the workings of the organisation, while most business leaders consider their roles to be primarily focused on the performance of the organisation, said Nick Tatchell. The role that senior leaders play in winning back the trust of their employees is to build a successful competitive organisation with a strong external brand and reputation, and to embed a culture that enables people to contribute fully to this success. This is much more than simply creating a workplace that people feel great about.
The link between increased employee engagement and improved business performance is well-established, as is the fact that senior leaders play a key role in driving employee engagement. So rather than ignoring employee engagement, or leaving it to HR, business leaders need to redefine for their employees how they intend to build trust and demonstrate interest in employees well-being. This will be critical in order to re-motivate employees in a post-recession world.
According to Towers Watson, what worked for an organisation pre-recession will not cut it in todays workplace. Fundamental changes in both the employee/employer contract and employees own priorities make a return to normal nearly impossible. Instead, organisations must hone their ability to educate employees in self-reliance, fostering within each person the knowledge and confidence necessary to effectively manage their careers and their financial future outside the safety net provided in the past.
About the study
These findings are part of the Towers Watson Global Workforce Study 2010, a survey of more than 20,000 private sector employees in 22 countries, including over 1,000 in the UK, to gauge employee attitudes and engagement. With its worldwide scope and reach, the Global Workforce Study is the most comprehensive analysis of the post-recession employee mindset available today. In the UK, employees were surveyed between November and December 2009 for the country-specific data segment featured here. The research builds upon several previous Global Workforce Study reports issued by Towers Perrin to provide companies with actionable insights around employee behaviours, opinions and engagement levels.