2012 towers watson global workforce study

7/27/2019 2012 Towers Watson Global Workforce Study

1/24


2/24

Table o Contents

Executive Summary 2

Closing Gaps in the Traditional Engagement Model 4

Drivers o Sustainable Engagement: What Matters Most 7

Managing the Dark Side o Stress 11

Manager Redefned 14

Organizational Reputation 16

A Look at Attraction and Retention:

Shi ting Elements in the Deal 18

Respondent Profle 20

About the Study 21Follow the conversation on Twitter: #2012gws


3/24

What It Will Take to Drive Strong Work orce Per ormance

in a Volatile Global EnvironmentThe 2012 Global Work orce Study provides a comprehensive snapshot o the attitudes and concerns o workers around the world. Its designed to shed light on how employees views a ect their engagementin their work and commitment to their employers, and ultimately, their behavior and per ormance onthe job. As such, it gives organizations and their leadership teams important insights into the elementso the work environment that help shape employee behavior and per ormance in positive ways. And itpresents a new and more robust de nition o engagement sustainable engagement designed or the21st-century workplace.


4/24


5/24

2012 Global Workforce Study

Retaining employees has more to do withthe quality o the work experience overall.While some elements like pay a ect bothattraction and retention, the latter depends armore on the quality o employees relationshipwith their managers, their trust in senior

leadership and their ability to manage stress onthe job.

There are doubts about the level o interest andsupport coming rom above. Just under hal o the respondents agree their organizations seniorleaders have a sincere interest in employee well-being. Equally disturbing, given the importance o managers in creating a positive work experience,is that ewer than hal o the respondents believetheir direct supervisors have enough time tohandle the people aspects o their jobs.

Viewing our ndings as a whole, two key pointsemerge. First, engagement, as traditionally de ned,is not su cient to give employers the sustainedper ormance li t they need or keep employeesdoing their work e ectively in todays pressured andast-paced work environment. Second, the root o the

problem lies in gaps in two critical areas that havebecome essential to sustainable engagement andthat organizations can close in cost-e ective ways.

Employees have been doing more with less and or less or over hal a decade, and that reality doesnt seem likely tochange anytime soon.

Businesses appear to be ata critical tipping point intheir ability to maintainengagement over time.


6/24


7/24


This risk is signi cant even in a growing economy,where retention is o ten a challenge. But itsparticularly problematic when organizations haveto count on sustained productivity rom a leanwork orce. When sustainable engagement starts todecline, companies become vulnerable not only to ameasurable drop in productivity, but also to poorercustomer service and greater rates o absenteeism

and turnover. They need to pay attention to processesand practices that improve on-the-job support,strengthen a sense o attachment to the organizationand account or the changing nature o the workexperience. Otherwise, the risk o a continuing drop insustainable engagement could worsen and begin toa ect business outcomes over time.

Inside Sustainable EngagementSustainable engagement describes the intensity o employees connection to their organization,based on three core elements:

The extent o employees discretionary e ort committed to achieving work goals (being engaged) An environment that supports productivity in multiple ways (being enabled) A work experience that promotes well-being ( eeling energized)

The chart below shows some o the key attributes undamental to each element o sustainableengagement.

Traditional engagement Enablement Energy

Belie in company goals andobjectives

Emotional connection (pride,would recommend employer)

Willingness to give extrae ort to support success

Freedom rom obstaclesto success at work

Availability o resourcesto per orm well

Ability to meet workchallenges e ectively

Ability to maintain energy at work

Supportive socialenvironment

Feelings o enthusiasm/accomplishment at work

Towers Watson uses a set o nine survey questions to measure the extent to which survey respondents believe these three elements are part o their work environment. Based on a statisticalanalysis o their responses, we categorize respondents into our distinct segments:

Highly engaged: Those who score high on all three aspects o sustainable engagement Unsupported: Those who are traditionally engaged, but lack enablement and/or energy Detached: Those who eel enabled and/or energized, but lack a sense o traditional engagement Disengaged: Those who score low on all three aspects o sustainable engagement

This segmentation allows employers to understand the root causes behind changes in employeebehaviors or per ormance, and more accurately pinpoint the practices or interventions required tomove people rom one segment to another over time.

When engagement starts to decline, companies becomevulnerable not only to a measurable drop in productivity,but also to poorer customer service and greater rates o

absenteeism and turnover.


8/24

6 towerswatson.com

We have already seen the beginnings o the revolution in the what, where and when o work.Jobs and tasks are being broken into component specialties, organized di erently, dispersedmore widely, and managed across borders and time zones. And these radical shi ts demandequivalent changes in how (and where) people are sourced, developed, trained, deployed,managed and rewarded.

Technology has played the biggest role in distancing workers rom the bricks-and-mortar, nine-to- ve workplace. Nearly hal (47%) o our global sample work remotely or in some kind o fexible arrangement. Moreover, they tend to have more positive views and perceptions o their

jobs and organizations than their o ce-bound peers. In another decade, according to variouspredictions, teleworking will expand even more, especially in industries dominated by highly skilled knowledge workers.

Technology is also driving the need or very di erent skills. A just-released study, Global Talent2021, conducted by Ox ord Economics with support rom Towers Watson and several majorglobal employers, points to a number o new and di erent competencies that HR executivesanticipate will be in high demand in the next ve to 10 years. These include digital skills, suchas working virtually and using social media; agile thinking, particularly the ability to deal withcomplexity and ambiguity, and assess and plan or multiple scenarios; interpersonal skills, such as e ective (physical and virtual) teaming and collaboration; and global operating ability, including managing diverse groups o people, understanding international markets and beingculturally sensitive.

As employers begin training their work orces to prepare or this reality, they must also contend witha realignment o the supply o and demand or talent around the world propelled by the agingpopulations and low birth rates in the developed economies, and the vastly improving educationalopportunities and systems in the developing economies. Already, according to Global Talent 2021, over hal (54%) o the worlds college graduates are coming rom Brazil, China, India, Indonesia,Mexico, Russia and Turkey, compared with 46% rom France, Germany, the U.K., the U.S. and theother industrialized countries that have traditionally been the primary providers and users o highly skilled and educated talent. This shi t has massive implications not only or sourcing talent, butalso or managing and engaging work orces with multiple generations rom an array o di erentcultures with many working in nontraditional arrangements.

Other macro-trends at the early stages o development rom hyper-specialization o jobs, toprocesses like crowd-sourcing are ar too new to assess with much accuracy. But its air tosay that the employer that isnt taking close note o , and preparing or, continuing, signi cantshi ts in the structure, nature and organization o work will likely be the one le t behind in theupcoming decades.

The implications or sustainable engagement are par ticularly relevant, as so much o the changein the work experience and environment will demand innovative styles o organizational supportand management. In many respects, this new work environment dependent on instantaneousand ree-fowing in ormation has the potential to dramatically improve productivity andcreativity. But adapting to it puts even more pressure on leaders, managers and employeesthemselves to embrace continuous learning, remain open to alternative work arrangements, andnd creative ways to give support and energy on the job.

Brave New World o Work and Workers


9/24


The logical question, then, is, what is required to shoreup the unsupported and reconnect the detached,particularly among those employee groups with speci cskills or roles most critical to business success?

Using statistical analysis, we tested the relativeimpact o a dozen workplace elements on sustainableengagement. Figure 2 displays the ve that havethe greatest collective impact, and highlights anillustrative set o practices and behaviors that makea di erence to employees in terms o traditionalengagement, enablement and energy.

For employers under pressure to increase salesand revenue, but constrained by limited unds andresources, there may be no better step to take rightnow than to identi y gaps in these areas that may be adversely a ecting sustainable engagement anddetermine actions necessary to close those gaps.

Two points are important to note here. First, incontrast to many o the more reward-orientedelements that a ect attraction and retention (seepage 18), the drivers o sustainable engagementocus almost entirely on the culture and therelational aspects o the work experience. Theseinclude the nature, style and quality o organizationalli e, not the programs themselves. Second, theimpact o these drivers is elt through thousandso interactions positive and negative, large andsmall that play out daily across an organization.Some o those interactions are interpersonaland local between employees and their directmanagers or inside a small work team. Others a ecteveryone across the organization.

Driv S ainabe Eng g men What matters most

Figure 2. Top fve drivers o sustainable engagement

Priority areas o ocus Behaviors and actions that matter to employees

Leadership Is e ective at growing the business Shows sincere interest in employees well-being Behaves consistently with the organizations core values Earns employees trust and con dence

Stress, balance and workload Manageable stress levels at work A healthy balance between work and personal li e Enough employees in the group to do the job right Flexible work arrangements

Goals and objectives Employees understand: The organizations business goals Steps they need to take to reach those goals How their job contributes to achieving goals

Supervisors Assign tasks suited to employees skills Act in ways consistent with their words Coach employees to improve per ormance Treat employees with respect

Organizations image Highly regarded by the general public Displays honesty and integrity in business activities

In contrast to many o the more reward-oriented elements thata ect attraction and retention, the drivers o sustainable engagementocus almost entirely on the culture and the relational aspects o thework experience.


10/24

8 towerswatson.com

The challenge in moving the needle in these areasis de ning the broad principles o behavior andthe corresponding processes and actions thatmust occur at the enterprise level, and ensuringthat these cascade appropriately to the local level

where they can infuence on-the-ground experiences.While policies and programs certainly come intoplay, the rst step has to be a comprehensiveexamination o core processes rom leadershipstyle, communication and values, to reportingrelationships, collaboration approaches and workarrangements. The ndings can help determinewhats required, broadly and locally, to improve thedaily interactions and experiences or individualemployees. Key questions include:

How do leaders earn employees trust andcon dence, and demonstrate interest in employeewell-being?

How do they balance messages about short-termpriorities and nancial results with longer-termvision and strategy?

Do employees understand the organizationsstrategy and how it connects to their own work?

Do managers have the skills and time necessary to e ectively di erentiate and manage employeesper ormance, coach their teams and supportindividuals career advancement?

Are career paths clear to employees asthey consider how to navigate todays fatterstructures with a variety o di erent employment

arrangements? Are the right tools and processes in place orworkers to collaborate and connect acrosslocations and unctions?

Do employees have some level o fexibility in theirschedules or work arrangements, and do they eelcom ortable taking advantage o it?

Are communication vehicles and contentappropriately tailored or diverse audiences acrossages, cultures and li e stages while providing thenecessary consistency o message?

These questions highlight the complexity inherent inworking on these undamentals. Getting the answersright requires commitment, time and ocusedattention, particularly rom senior leadership. Butthe payo can be signi cant, positively a ectingvarious nancial and operational metrics, includingproductivity and retention.

Tracing the Links From SustainableEngagement to Per ormance

In a recent analysis o 50 global companies, orwhich we had both sustainable engagement dataand relevant nancial data, we ound strikingdi erences at the organizational level in averageoperating margin relative to sustainable engagementlevels (Figure 3). As shown, those companieswith low traditional engagement had an averageoperating margin just under 10%. Among thosewith high traditional engagement, average operatingmargin was just over 14%. But among those withhigh sustainable engagement, average one-yearoperating margin was close to three times higher, at just over 27%. While many other elements a ectmargin and in more direct ways this ndingunderscores why organizations need to think morebroadly about all o the actors that infuence theirper ormance, in both the short and long term.

Figure 3. How engagement affects nancial resultsSame-year operating margin: Study of 50 global companies

0%

5%

10%

15%

20%

25%

30%

Highsustainableengagementcompanies

Hightraditional

engagementcompanies

Lowtraditional

engagementcompanies

14.314.3

9.99.9

27.427.4

Source: Towers Watson normative database


11/24


Using the employee-level data rom this study, wealso examined the relationship between sustainableengagement, productivity and retention metrics.Heres what we ound:

Highly engaged employees have lower

presenteeism (lost productivity at work) andless absenteeism than disengaged employees.The ormer lose an average o 7.6 days per yearto presenteeism, compared with an average 14.1days or the disengaged employees. In a similarbut less striking vein, the highly engaged losean average 3.2 days per year to absenteeism,compared with 4.2 days or the disengaged.

Highly engaged employees are less likely toleave their employer than disengaged employees.Only 18% o highly engaged global respondentssaid they were likely to leave their employer inthe next two years, compared with 24% o theunsupported and ully 40% o the disengaged.Similarly, 72% o the highly engaged said they would pre er to remain with their employer eveni they had a comparable opportunity elsewhere,compared with 58% o the unsupported and 28%o the disengaged.

Setting the Right Change Agenda

Amid the range o competing business and HRpriorities, its o ten di cult to allocate limitedresources in optimal ways to achieve desired growthin revenues and pro ts. But by ocusing on the vedrivers o sustainable engagement, organizationscan set a ocused and relevant agenda that canmake a di erence in their per ormance, o tenwithout a signi cant monetary investment. Whatollows is a closer look at the actions employerscan consider to close gaps in those ve areas.

For most organizations, the best opportunity toexpand the highly engaged segment lies with theunsupported segment. These are individuals whoalready have a well-established connection to theorganization. Yet they are missing some things thatmight move them urther along the engagement

spectrum like greater autonomy, and involvement

in setting their own schedules and managing theirwork, eeling able to take some risks and try newthings, and getting help and direction rom theirmanager. These are the kinds o changes that areo ten a matter o strengthening or customizingexisting policies and practices at the local level toprovide the support and sense o positive energy that employees want and need.

The Evolving Leadership Model

Leadership has been a primary driver o employeeengagement or as long as we have studied it. Inthis study, roughly hal o our global respondentsagreed their senior executives do a good jobstrategically, in terms o growing the business(53%) and managing costs (49%). And just underhal (48%) said they have trust and con dence inthe job their leaders are doing. O course, thatleaves a signi cant number o respondents whoeither disagree or are unsure about their level o trust and con dence in their leaders.

Even larger gaps emerged in areas a ecting thepeople side o operations rom leaders willingnessto consider employees views and interests, to theirability to develop uture generations o leaders. Just39% o the global sample agreed their leaders aree ectively preparing the next generation o leadership(Figure 4), while ully a quarter rated their leadersas poor or very poor in this area. Note, too, thatagreement levels or the unsupported closely mirrorthose or the overall sample, while nearly two-thirdso the highly engaged have a avorable view o leadership development.

By ocusing on the ve drivers o sustainableengagement, organizations can set a ocusedand relevant change agenda that can make a

di erence in their per ormance, o ten withouta signi cant monetary investment.

Figure 4. Leadership rom a people perspective

% agreeing Global sample Highly engaged Unsupported Detached Disengaged

Employees have trust and con dencein job leaders are doing

48% 79% 51% 31% 16%

Senior leadership has sincereinterest in employees well-being

45% 74% 44% 28% 18%

Senior management does a good jobdeveloping uture leaders

39% 65% 36% 24% 17%


12/24

10 towerswatson.com

Signi cantly, these gaps are consistent withconclusions rom a number o academic studiespredicting the competencies that will be required inleaders o the uture and are already increasingly in demand today. These include areas like strategic

fexibility, risk leverage (knowing which risks areworth taking as well as avoiding), technologicalsavvy, interpersonal agility, global and culturalacumen, and rapid decision making. In thecurrent vernacular, this requently translatesinto the impor tance o accessibility, authenticity and transparency. These traits, o ten actively discouraged in prior generations o closed-doorleadership, are recognized as undamentalto improved employee perceptions in todaysenvironment.

For employers, these shi ts pose three immediatechallenges. One is recognizing that current practicesneed to evolve in very di erent ways. While thoseresponsible or leadership development may believetheir processes are e ective, only slightly lessthan hal o our respondents in the next-generationleadership tier the target o those processes actually agree. The second challenge is determininghow to identi y and assess these new competenciesin selection processes. And the third is makinga commitment to develop and nurture leadershipcompetencies more consistently and fuidly in bothcurrent- and next-generation leaders.

Wherever your organization is in terms o itsleadership model, there are a number o immediateactions to consider that can help strengthen theconnections between leaders and employees.Speci cally:

Establish (or review and re resh) a well-de ned competency model or leadership thatincorporates the new requirements or leaders.

Align competencies with strategic plans,particularly in terms o global expansion.

Regularly assess leaders capabilities against themodel, and deliver development opportunities toclose competency gaps.

Ensure succession plans are robust and extendar enough into the organization.

Help senior executives nd meaning ul waysto demonstrate interest in, and commitmentto, employees through regular communication,recognition and visible support or meaning ulprograms.

Create opportunities or leaders to actively sponsor innovative approaches to how, when andwhere work is accomplished.

Theres no question that employee engagementis taken more seriously in the executive suitetoday than a decade ago. In some organizations,its now a component o the CEO scorecard. Thenext logical stage in this process is to elevatethe priority o those aspects o new leadershipbehaviors most critical to sustainable engagement.

In some respects, in act, the work orce can serveas a proving ground or leaderships e ectivenessin mastering the evolving competencies that willultimately a ect their companys reputation andprospects with customers, investors, suppliersand other stakeholders.

Strategic fexibility Transparency

hen ici y Rapid decision making

Accessibility Global and cultural acumen

k Levag

Competencies that will be required in leaders o the uture:

Interpersonal agility


13/24


Today, with the business world operating 24/7, stressis a act o li e in virtually every organization, and acertain amount is known to boost energy on the job.But when employees eel overwhelmed by seemingly impossible workloads and endless demands on theirtime, stress can turn negative, and some level o detachment or disengagement can set in.

Our data on stress in the workplace present a very mixed picture, as Figure 5 shows. With the exceptiono the highly engaged segment, respondentsviews on stress and workload are more similaracross unsupported and detached segments thanis the case with any other issue. This suggestsinterventions to relieve stress and workload couldhave a widespread positive impact.

Man g ng he D k S de S es

Figure 5. A healthy work environment?


Amount o work employees areexpected to do is reasonable

54% 79% 50% 51% 25%

Stress levels are manageable 53% 74% 52% 51% 27%

Work arrangements are fexibleenough to meet needs

52% 78% 49% 45% 26%

Employees are working more hoursthan normal in past three years

50% 59% 49% 47% 39%

Enough employees in work group toget job done right

49% 74% 43% 43% 23%

Organization makes it possible tobalance work and personal li e

45% 72% 41% 35% 20%

Organization promotes healthy workenvironment 42% 65% 43% 29% 18%

Senior leaders support policiesthat promote employee health andwell-being

42% 68% 43% 27% 16%

O ten bothered by excessivepressure on the job

38% 34% 38% 37% 45%


14/24

12 towerswatson.com

One thing we see rom the attitudes o the highly engaged is that an organizations limited resources(whether a unction o organizational mandate orlabor market realities) dont have to translate into adispiriting work experience. To avoid the dark sideo stress, employers need to start with work orceplanning, ensuring in particular there is a matchbetween the required work and employees skillsand experience. Do the people per orming variousassignments have the right skills? Where arethose workers in their careers, and what retentionrisks do they present, rom impending retirement,to departure or another company? How is workorganized and dispersed, especially in areas whereskills may be insu cient? Are promotion policiescontributing to skill gaps as those moving up theladder stop doing certain kinds o work?

Even without budgets or hiring (or enough o the rightpeople to hire), there are ways to re resh skills ortrain willing employees in new areas. Reviewing howwork is organized and deployed across individualsand teams also presents opportunities to reallocatemore e ciently, or shi t roles or accountabilities tobetter match ability with need. Now is the time to getahead o potential talent gaps and evaluate wherethe business is expected to grow or shrink over thenext three to ve years, how the composition o thework orce may change and what the implications areor sourcing new talent needs.

To complement a well-designed planning process,organizations can take creative approaches toproviding balance, fexibility and improved autonomy,all o which give people greater control over theirwork lives. Actions to o er balance and fexibility canrange rom teleworking, to job sharing, to fexiblescheduling, to reduced hours or compressed workweeks.

Broader empowerment strategies are also essentialin strengthening employees sense o control. Itstelling, or instance, that only 42% o the globalrespondents said their organization did a good job o soliciting employees opinions or suggestions, while

just 38% agreed their company per ormed well inacting on those suggestions. And only 39% agreedtheir organizations management e ectively involvedemployees in decisions that a ected them. Evenmore telling, the picture was considerably di erentor the highly engaged segment, where slightly morethan two-thirds agreed their organization solicitedand acted on employees suggestions.

While the nature o the business will dictatewhats possible in these areas, many organizationsactually have more options than they mightotherwise imagine. Being open to innovation in thedesign o work, or choice o workplace, can be ahighly e ective way o signaling the organizationscommitment to positive change in an environmentreed by technology rom many o the constraints o prior decades. And supplementing that commitmentwith practical steps tailored appropriately orindividuals situations rom options or exercise,

to health ul ood choices, to disease managementsupport or chronic illnesses can giveemployees con dence in the organizations genuinecommitment to easing pressure.

To avoid the dark side o stress, employers need

to start with work orce planning, ensuring inparticular there is a match between the requiredwork and employees skills and experience.

Now is the time to get ahead o potential talent gaps and evalu-ate where the business is expected to grow or shrink over thenext three to ve years, how the composition o the work orce

may change and what the implications are or sourcing newtalent needs.


15/24


16/24

14 towerswatson.com

Supervisors and managers wear at least two hats.They are responsible or meeting their own and theirunits objectives rom an operational perspective.And theyre also responsible or overseeing,coaching and mentoring the people who report tothem. While employees give high marks to managerson the ormer, scores lag on the latter. Just 46%o the global sample agreed their manager hassu cient time or the people aspects o the job apercentage that drops to about one- th among thedisengaged (Figure 7).

Yet when it comes to actions that can support both

enablement and energy, ew things can have asmuch immediate impact as an e ective relationshipwith ones direct manager. HR programs abound,and an organizations values and priorities must be

in the mix, o course, but its the local interactions,person to person, day a ter day, that ultimately infuence how employees eel about stress, theirworkload, their growth opportunities and theirlikelihood o remaining with the organization.

The player/coach model o the managers job is wellestablished in most organizations, or theoretically practical (i not always economically sound) reasons.But organizations can nevertheless take a numbero steps to improve their managers ability toocus on people issues. The rst is to understandwhat actually matters most to employees in the

supervisory relationship. When we examined whichbehaviors infuenced employees views o managere ectiveness, three rose to the top in the ordershown highlighted in Figure 7.

Man g R defned

Figure 7. The supervisory relationship


Manager assigns tasks suited toemployee skills

63% 85% 63% 61% 36%

Manager clearly communicatesgoals and objectives

58% 82% 59% 54% 29%

Manager encourages new ideas andnew ways o doing things

57% 80% 55% 51% 31%

Manager acts in ways consistentwith his/her words

54% 77% 51% 46% 29%

Manager helps remove obstaclesto doing job well

53% 78% 47% 48% 27%

Manager coaches employees toimprove per ormance

49% 73% 49% 42% 21%

Manager has time to handle thepeople aspects o the job

46% 71% 43% 40% 21%

When it comes toactions that can sup-port both enablementand energy, ew things

can have as muchimmediate impact asan e ective relation-ship with ones directmanager.


17/24


Note that all o these items relate to aspectso other drivers o sustainable engagement,underscoring managers central role in enablement,energy and traditional engagement. Managers whomake sure employees roles allow them to makethe best possible use o their skills, and who makesure people know whats expected o them, canhelp enhance the sense o shared accountability thats part o sustainable engagement. Goal clarity

can also help alleviate pressure: Explicit goals setboundaries around an employees workload andprovide an avenue to discuss reevaluating prioritieswhen competing pressures become too great.

Managers who act in ways consistent with theirown words and the organizations values and ethicsset the right tone and shape a positive view o leadership overall. And managers who consistently coach their employees in ways to improveper ormance are not only more likely to become thego-to individual or help with problem solving, butalso provide rein orcement on career advancement

and skill building, key drivers o sustainableengagement.

Un ortunately, in many organizations, managers areill equipped to take on these challenges. They areo ten promoted or technical acumen, not peopleskills. As player/coaches, they are expected bothto produce directly (write code, sell products,analyze data), and to lead their people and increaseoverall team productivity. Many managers nd thiscombination challenging; some nd it impossible.And even in organizations where some training isprovided, it can be rudimentary, inconsistent orine ective.

Organizations that expect their managers toenhance employee per ormance and, ultimately,increase the organizations competitive strengths,must ask and answer some critical questions:

Is the managerial role de ned or maximum unitper ormance (not just maximum manager directoutput)?

Are spans o control broad enough to leveragethe role e ciently and yet narrow enough toallow managers to spend enough time with eachindividual?

Are manager competencies clearly de nedor di erent unctions and units across theorganization?

Are managers assessed and measured againstthose competency or role pro les, with appropriateresulting action?

Is the people aspect o the role appropriately emphasized, evaluated and rewarded?

Are training, tools and processes readily available and viewed by managers as help ul in areas

like per ormance reviews, goal setting and dealingwith remote teams?

In a very real sense, the manager is at the hearto what we might think o as a personal employeeecosystem shaping the individual experienceto help deliver the crucial elements o traditionalengagement, enablement and energy day in andday out.

Managers who make sure employees roles allow them to make thebest possible use o their skills, and who make sure people knowwhats expected o them, can help enhance the sense o shared

accountability thats part o sustainable engagement.

Managers who act inways consistent withtheir own words andthe organizationsvalues and ethics setthe right tone andshape a positive viewo leadership overall.


18/24

16 towerswatson.com

Perhaps surprising to some employers, theorganizations image ranks among the top driverso sustainable engagement. But working or anorganization with a marquee name and reputationhas always signaled stability and security. Today more than ever, it rein orces a sense o personalpride, which builds the emotional connection thatspart o traditional engagement. And over time,it directly supports an organizations attraction

strategy, since it puts a positive buzz into themarketplace across all the sites and blogs jobholders and seekers routinely visit.

As Figure 8 shows, less than 60% o the globalsample agreed their employer was ethical and highly regarded by the public. This is certainly not anindictment, but does suggest room or improvementand could serve as a means o more closely binding

Figure 8. Company image

% agreeing Global sample Highly engaged Unsupported Detached DisengagedOrganization conducts businessactivities with honesty and integrity

58% 84% 61% 47% 27%

Organization is highly regarded by general public

57% 81% 59% 46% 29%

the detached (who lack that emotional connection)to the organization. Among the issues to consider:

Are the organizations vision, mission and valuescurrent, relevant and embedded in the employeevalue proposition, whether thats explicit orimplicit?

Are there well-documented and widely sharedpolicies on appropriate business conduct andtraining or employees in those areas?

Do leaders consistently uphold the values, both inpublic appearances and within the company? Arethey held accountable or honesty and integrity in how their per ormance is measured andrewarded?

Does the organization have a social responsibility program thats meaning ul to all relevantstakeholders, rom employees, to localcommunities, to other important stakeholders?

Org niza i al R pu a i


19/24


Rede ning Retirement: Challenges or Employers andWorkers AlikeViews about retirement are changing rapidly across theworld. At what point can, or should, people retire? Whatdoes a nancially secure retirement look like? At what

age, and or how long? Who should nance it? Whatare the responsibilities o individuals, employers andgovernments?

In the developed markets like Japan, the U.K. and theU.S., rapidly aging populations are putting tremendouspressure on balance sheets and cost competitivenessas companies struggle with mounting legacy pensionobligations. At the same time, low birth rates meanlooming shortages in key areas and the need to lookelsewhere or the next generations o talent. Workers,aware o ongoing cost and risk shi ting by theircompanies, increasingly want to extend their working

career, creating issues or younger workers wantingto advance (and or whom advancement is critical toretention and engagement). In act, 36% o the globalrespondents agreed their options or advancement werebeing limited by employees in positions above themchoosing not to retire.

In the emerging economies, the picture is quite di erent,with countries like Brazil, India and Indonesia trying tobalance becoming a source o talent or other countriesamid an increased need to keep talent at home, andcontinuing to nance the education and development o the next generations o their young populations.

Respondents concerns about their nancial uture andretirement security showed up throughout the survey.Consider the ollowing:

Almost a th (19%) are not con dent about managingtheir income needs in retirement, while nearly a third(31%) arent sure.

Closer to a quarter (23%) are not con dent inmanaging their health care needs in retirement, with athird unsure.

45% are con dent theyll have su cient nancialresources to take them through 15 years o retirement;that drops to a third (34%) over 25 years.

Nearly 40% o respondents expect to retire later thanthey did just three years ago.

The uncertainty about their retirement prospects hasled to a growing desire among employees or greatersecurity in their reward package. In a series o trade-

o questions to determine the relative importance o compensation opportunities versus retirement security,respondents chose a guaranteed retirement bene t(proxy or a de ned bene t) over paid time o , a greaterbonus opportunity or even an increase in pay. In anironic twist o timing, prompted in part by the nancialcrisis and continuing capital market volatility, it appearsthat employees have come to value the attributeso the de ned bene t plan at the very time so many organizations are winding theirs down and using variousrisk trans er solutions to meet their long-term obligationsin an a ordable way. For organizations that continue too er a de ned bene t plan, this presents a signi cantopportunity to emphasize their plan in their employeevalue proposition, and gain competitive advantage inattracting and/or retaining security-conscious employees.

In act, respondents with a de ned bene t plan are morelikely to say they took their current job because o thatbene t than those with a de ned contribution plan. Forthose organizations moving away rom de ned bene tplans, the challenge takes shape di erently: How can thecompany give employees a sense o long-term security through account-based approaches that will be solely or largely in employees direct control? While many organizations are already implementing nancial education

programs, automatically enrolling employees in savingsplans (where thats easible) and expanding investmentoptions, others are beginning to look or new approachesto designing account-based plans, with eatures that couldmimic some o the most compelling advantages o theclassic de ned bene t. For example, some companiesare starting to o er retirees the opportunity to purchasean annuity (a li etime income stream) with the assetsin their account-based plans. Others are looking too er investment options that are designed to protectparticipants rom the risk o outliving their money and theimpact o market volatility by purchasing insurance onsome portion o their retirement account.


20/24

18 towerswatson.com

The same elements that drive sustainableengagement also underpin aspects o an employersstrategy or nding and retaining talent. We knowrom long experience that attraction, retentionand sustainable engagement are best thought o as interrelated and overlapping phases in a fuidemployment li e cycle. And while core elements,like management, image and career, thread throughall three phases, employees value them di erently across the phases. Its important, there ore, ororganizations to be nimble and fexible in designingand delivering their attraction, retention andengagement strategies, allowing them to shi t theemphasis on relevant elements as their own goalsand needs as well as those o employees change.

Lets start with attraction. As noted earlier, and asFigure 9 con rms, our global respondents remainocused on security and the basics o the work

situation. While there are di erences in attractiondrivers rom country to country (less in the mixthan in their order o importance), these are thingsemployers need to emphasize in their recruitingno matter where they operate. But these elementscan and should be fexed, depending on the locallabor climate, regulatory requirements, the prevailingculture and the nature o the work. I the organizationis under pressure to hold the line on base pay, orinstance, the ability to o er an alternative workarrangement can make the deal more attractive,especially i connected with meaning ul training andcareer development options. I career paths arewell de ned and well documented, the prospect o advancement can help dispel concerns about long-term employment security.

However, or more traditionally ocused employers,this kind o creative fexibility requires a newmindset that new hires or current employees can beas productive and engaged outside a conventionalwork location as in one. Revisiting long-heldassumptions about work and peoples work ethic iso ten an important rst step in shaping a deal orthe current environment.

The picture or retention is di erent rom that o attraction. While salary remains critical, all otherelements have to do with the nature and quality o the work experience and value proposition, whichare closely aligned with the drivers o sustainableengagement. And as noted earlier, there is a clearlink between engagement and retention, with highly engaged employees at reduced risk or voluntary departure.

In the current environment, retention is an areawhere the interests o employers and employeesappear to be aligned. Over hal o the global sample(52%) agreed theyd pre er to remain with theircurrent employer, even i another job were availableto them. And virtually the same percentage (53%)agreed theyd like to stay with their current employeruntil they retire. While some o these views no doubtstem rom caution about the economy and the labormarket in various countries, the restless mobility predicted a decade ago has not come to pass. Inact, we ound very little variation in views aboutretention across all the generations in our sample.

A Lok ac i nd R tn i Shi ting elements in the deal

Figure 9. What it takes to attract and retain

Driver Attraction Retention

1 Base salary Base salary

2 Job security Career advancementopportunities

3 Career advancementopportunities

Relationship with manager

4 Convenient work location Trust/Con dence in leadership

5 Learning and developmentopportunities

Ability to manage/limitwork-related stress

Its important or organizations to be nimbleand exible in designing and delivering their

attraction, retention and engagement strategies,allowing them to shi t the emphasis on relevantelements as their own goals and needs aswell as those o employees change.


21/24


But employers should not interpret employeesdesire to build a long-term relationship with theirorganization as a commitment to stay put no matterwhat. Equally telling, 41% also said they would haveto take a job elsewhere to advance their career. Foremployers, the message is clear: I pre er to beemployed and highly engaged here, but I need to seeevidence that I can grow my skills and career. Andan e ective way to provide that evidence is precisely through well-de ned and communicated careerpaths, skill training, and a strong and e ective

supervisory relationship.

Bringing It All Together

Because all o these workplace elements areundamental to every organization, they are a ectedby every policy, program and interaction that occurslocally and at the enterprise level in an organization.

No organization can get all o these elements rightall or even most o the time. Business pressuresintrude. Problems shi t priorities. Investment capitalis reallocated or pulled back. Key infuencers leaveor turn their attention elsewhere. Thats why ocusand discipline are so important. Organizations needto learn what will have the most impact, have thediscipline to take needed steps in those key areas

and build up employee goodwill, earning them thebene t o the doubt on those occasions when thingsdont go right (as invariably will be the case).

The ndings rom our study provide insights intowhats working and what isnt rom the work orcesperspective, and where speci c actions or behaviorscould help turn the tide, especially or thosesegments important to the organization. The study also suggests the importance o having a thoroughand up-to-date understanding o the current stateo employee attitudes. While many employersroutinely survey some or their entire work orce invarious ways, it is important to ensure they ocuson the right attributes and evaluate the importantconnections across responses. And they dont allact on what they learn, either immediately or overthe long term.

Its easy to be distracted by competing priorities.But its essential or organizations and theirleaders to have a clear understanding o whatmatters to employees, and why and how thata ects their productivity and behavior on the job.Without that insight, creating the conditions thatshape a compelling work experience and promotesustainable engagement is almost impossible.

Its essential or organizations and their leaders to have a clear understanding o what matters to employees, and why andhow that a ects their productivity and behavior on the job.

Engagement, as traditionally de ned, is not sufcient togive employers the sustained per ormance li t they need

or keep employees doing their work e ectively intodays pressured and ast-paced work environment.


22/24

20 towerswatson.com

den Pr ile

56% Male 44% Female

Gender

56%

44%

23% Under 30 27% 30 39 24% 40 49 26% 50 or older

Age

27%

23%

24%

26%

10% Senior management 20% Mid-level management 17% Supervisor/Foreman 29% Professional, technician, specialist 17% Nonmanagement salaried 7% Nonmanagement hourly

Job level

10%

17%

7%

20%

29%

17%

24% 999 and under 33% 1,000 4,999 12% 5,000 9,999 31% 10,000 or more

Organization size (number of employees)

33%

24%

12%

31%

Country list

Argentina

Australia

Belgium

Brazil

Canada

China(excludes Hong Kong)

France

Germany

Hong Kong(excludes mainland China)

India

Indonesia

Ireland

Italy

Japan

Malaysia

Mexico

Netherlands

Philippines

Russia

Singapore

South Korea

Spain

Sweden

Switzerland

Taiwan

Turkey

United Arab Emirates

United Kingdom

United States


23/24

Abo t the Study The Towers Watson Global Work orce Study covers more than 32,000employees selected rom research panels that represent the populationso ull-time employees working in large and midsize organizations acrossa range o industries in 29 markets around the world. It was elded by a third-party vendor via an online questionnaire between February andMay 2012. The study is designed to help companies better understandtheir diverse employee segments and the actors that infuence employeeper ormance on the job by gauging changing attitudes that a ectattraction, retention, engagement and productivity.

For more in ormation, please visittowerswatson.com/sustainable-employee-engagement.

Related research rom Towers Watson:

Global Talent 2021: A New Global Era for Talent Emerges (in collaboration withOx ord Economics)

Global Talent Management and Rewards Survey Retirement Attitudes Survey: Three-part series


24/24

Copyright 2012 Towers Watson. All rights reserved.

About Towers Watson

Towers Watson is a leading global pro essional ser vicescompany that helps organizations improve per ormance throughe ective people, risk and fnancial management. With 14,000associates around the world, we o er solutions in the areaso employee benefts, talent management, rewards, and risk andcapital management.

2012 towers watson global workforce study

Documents