Employee confidence in the business environment continues to fall
Employee confidence in the business environment continues to hemorrhage, decreasing 6.2% from an index score of 47.6 in 1Q19 to 44.6 in the second quarter of 2019, according to Gartner, Inc. This time frame has seen a period of unprecedented economic and political uncertainty, including the extension of the Brexit withdrawal process beyond the original exit date of 31st March 2019, and the election of Boris Johnson to the role of Prime Minister.
Employee confidence in near-term business conditions and long-term economic prospects in the U.K. sits seven percentage points below the international index average at 44.6% and 51.6%, respectively. This is the third consecutive quarter that employee confidence has declined; since the third quarter of 2018, U.K. business confidence has fallen 15.5 percentage points.
Employees’ active job seeking behaviour has also decreased by nearly 8%, while their professed intent to stay with their current organizations has increased 11.4%. In the face of a job market that looks increasingly stormy, UK employees are seeking to “hunker down” in their current roles.
“With all of the economic uncertainty surrounding Brexit, a previously vibrant U.K. labor market now seems to be running out of gas,” said Brian Kropp, chief of research for the Gartner HR practice. “Opportunities, rewards, and bright business prospects are perceived to be waning. Historically, these sorts of shifts precede a recession, and coupled with the headwinds of a U.S.-China trade war, a global decline may be in the future.”
While intent to stay has increased and active job-seeking has decreased, passive job-seeking has seen a significant and sustained rise since the third quarter of 2018. As of the second quarter of 2019, 59.3% of the UK workforce report passively looking for other employment — nearly 10% above the global average of 50.9%. While employees might be looking to stick it out with their current employer during the economic storms ahead, their loyalty is not necessarily also on the rise.
These changes in the UK labor market are also symptomatic of longer-term shifts in employee attitudes and sentiment. There remains a significant differential between the outlook of British citizens, and non-British citizens as those employees who are not native to the UK are far more pessimistic of future prospects, given the uncertain terms of their rights to work following Brexit.
According to a recent Gartner survey, nearly half of EU citizens polled (46%) expressed disgust at the prospect of Brexit — more than double that of UK citizens. And, in the week of 23rd July, when Boris Johnson took office as Prime Minister, the percentage of EU respondents reporting fear in response to Brexit rose by five percentage points — an increase not shared by U.K. citizens, who appeared relatively unfazed.
Gartner’s 2Q19 Global Talent Monitor report reveals that the reasons employees give for leaving their previous employer are markedly different for the UK workforce, than those cited globally.
In the second quarter of 2019, compensation, future career opportunity and people management maintained their rankings as the top three bugbears for departing employees globally. Among the UK workforce, however, people management was ranked as the top reason for leaving a previous employer; work-life balance and manager quality were ranked second and third, respectively.
The low ranking of compensation among UK employees — resting in an unchanged No. 8 position from the first quarter of 2019, behind factors such as development opportunity (No. 5) and recognition (No. 6) — highlights that employees in the UK workforce are more concerned with the less-tangible benefits employers can provide that affect overall quality of life.
“Understanding what your employees value most enables organizations to tailor their Employee Value Proposition (EVP) to promote those specific job attributes that will most appeal to candidates,” said Kropp. “This can bolster recruiting efforts as Gartner research shows that when candidates view an EVP as attractive, employers can reach 50% deeper into the labor market.”
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