Here’s a new survey that is worth noting but that will not surprise any manager or executive who has a pulse: The deep cost-cutting that so many employers have been making to deal with the current economic crisis have “contributed to a sharp decline in the morale and commitment of their workers, especially top performers, according to an annual survey by Watson Wyatt, a leading global consulting firm, and WorldatWork, an international association of human resource professionals.”
Yes, if you have been managing and awake at all during this Big, Bad Recession, you know that A) organizations have been slashing budgets and cutting costs in order to survive; and, B) that such large-scale cost cutting tends to have a highly negative impact on the most critical part of your organization—your workforce.
According to the 2009/2010 U.S. Strategic Rewards Survey, “employee engagement levels for all workers at the companies surveyed have dropped 9 percent since last year and close to 25 percent for top performers. Additionally, 36 percent of top performers say their employer’s situation has worsened in the past 12 months and the number who would recommend others take jobs at their company has declined by nearly 20 percent. Compared with last year, top-performing employees are 26 percent less likely to be satisfied with advancement opportunities at their company. They are also 14 percent less likely to want to remain with their company versus take a job elsewhere.”
In addition, the survey found that “high-performing employees are 29 percent less confident in management’s ability to grow the business. And 41 percent believe that pay and benefit changes made by their employer in the past year have had a negative effect on work quality and customer service.”
“The fallout from the actions employers have taken in response to the recession is now coming to light, and it is significant,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, in what seems like a bit of an understatement. “Having less engaged and committed workers is a major concern for employers. This could have a long-lasting and detrimental impact on productivity, quality and customer service, as well as an increase in the risk of companies losing their best employees.”
From my perspective as editor of a publication that closely follows how organizations manage their workforce, this survey simply puts a spotlight on what many have seen for some time: that there is going to be a long-term impact on organizations due to the sometimes cavalier, sometimes ham-fisted and often less-than-skillful ways that some businesses have chosen to cope with the worst economic downturn in 75 years.
I’ve argued recently that businesses everywhere need to truly engage workers and help them get past the bad feelings that so many have about their organizations and their jobs. With a possible economic recovery on the horizon, it is time for America’s business leaders to step up and start helping America’s workforce out of its funk.
The Watson Wyatt/WorldatWork Strategic Rewards Survey should be a wake-up call for all employers that there will be fallout from all that has happened during this downturn long after we are back in a strong recovery mode. And as bad as the results of this survey are, here’s something to keep in mind: The survey was conducted in May, more than three months ago. My guess is that these survey results would be much, much worse had they been taken in July or August—and if you’re a manager, that’s a scary prospect to contemplate.
“The Massachusetts economy is on the mend,” the Globe reports, “and the job market is showing signs of stabilizing. Temporary employment, considered a leading indicator for labor markets, has ticked up in each of the past four months. Key sectors of the state economy have posted job gains. Employers, who froze hiring in the darkest days of the recession earlier this year, are beginning to fill positions.”
And then there are these telling quotes that make you sit up and take notice.
“Six months ago, people were hunkered down. Nobody was sticking their head up,” said Dave Sanford, executive vice president at Winter Wyman Cos., a Waltham, Massachusetts-based staffing firm. “Now, they’re beginning to feel it’s OK to come out of the hole.”
“Some of our stronger sectors are showing signs of stabilizing,” said Elliot Winer, a regional economist based in Sudbury, Massachusetts. “The opportunities that are out there right now require education, training, and skills.”
Now, no one in the Globe story is saying that they see an imminent recovery anytime soon—not with Massachusetts posting an unemployment rate of 8.8 percent, a figure that is expected to rise in 2010 given how cautious employers remain.
In fact, Sanford says, “There’s no sense yet that the gates are open, the lights are on, and everybody goes back to work. But employers are cautiously optimistic that the economy is going forward. They’re just waiting for things to get a little brighter.”
Having employers feeling a little optimistic is critical if we’re going to start reversing the terrible economic trends we have been experiencing since this Big, Bad Recession started in December 2007. Massachusetts certainly isn’t a bellwether for the nation, but if you’re like me, you’ll take whatever good news wherever you can find it. And maybe, just maybe, this is the start of a small but growing trend that will help us not only start to see some recovery, but perhaps also allow employers to start thinking about investing in their workforces again.
It was the English philosopher Thomas Hobbes who described the life of mankind when in his natural state as “solitary, poor, nasty, brutish, and short,” and it’s an apt description of the mood of many American workers as we approach Labor Day 2009.
Here’s some research that bears this out: It’s Adecco Group North America’s latest American Workplace Insights Survey that was conducted for Adecco by Harris Interactive. It shows that as Labor Day rolls around, a majority of workers are dissatisfied with their employers, particularly in these three areas—compensation, career growth and retention efforts.
The numbers break down like this:
• Two-thirds (66 percent) of American workers are not currently satisfied with their compensation.
• Additionally, 78 percent are not satisfied with their company’s overall retention efforts, while 76 percent are not satisfied about future career growth opportunities at their company.
• Working relationships are also strained, with almost half (48 percent) of workers saying that they are not satisfied with the relationship they have with their boss and 59 percent saying they are not satisfied with the level of support they receive from their colleagues.
• Workers are also critical of their organization’s brain trust, with 77 percent saying that they are not satisfied with the strategy and vision of their company and its leadership.
• In addition, some 68 percent of workers say they aren’t satisfied with their company’s contribution to their retirement plans.
“What workers are telling us,” says Bernadette Kenny, chief career officer at Adecco Group North America, “is that even during a recession, just having a job does not equate to job satisfaction. Employers need to be conscious of the concerns their staff is managing through on a daily basis and proactively come up with the appropriate solutions to improve retention and reduce the current and future high cost of turnover.”
I think Bernadette Kenny is on to something. Yes, everyone who has managed to avoid becoming another unemployment statistic should be happy that they’re still working, but that’s not exactly a rallying cry that’s going to get your workforce fired up and more engaged. Smart managers, as Kenny correctly points out, need to be actively plugged in to what their staffs are going through and looking for solutions to help them get through it.
The Adecco survey has a few suggestions for how managers can help to reward and retain workers even when dollars are tight, and for the most part, I think the suggestions are useful.
However, I’ve said this before and I’ll say it again: Businesses everywhere need to actively engage and help workers get past the depression and bad feelings that so many have about their work and the organizations they work for. In other words, leaders need to step forward and help their workforce get their mojo back.
This latest research by Adecco is just another in a long line of surveys that show how workers are feeling. With a possible economic recovery on the horizon, it is clearly time for America’s business leaders to step up and start helping America’s workforce out of its economic funk.
Yes, there are still a lot of those delusional, happy-talk types out there—and here’s a good example of what I’m talking about—but these head-in-the-sand observers are grasping at straws and overreacting to what is, at best, data that indicate a very, very slight and moderate economic uptick.
My view is formed more by what I’m reading in places like The New York Times, where a story just today said, “The nation’s fiscal outlook is even bleaker than the government forecast earlier this year because the recession turned out to be deeper than widely expected, the budget offices of the White House and Congress agreed in separate updates.”
And, it looks like I’m not alone in my pessimistic view. A new survey just released by the Workforce Institute at Kronos Inc. and conducted by Harris Interactive suggests that a lot of employees may not be feeling particularly optimistic and workplace productivity has been a casualty of the Big, Bad Recession.
Here are some of the survey highlights:
• Some 38 percent of respondents employed full or part time said there had been layoffs in the past year at their primary place of employment.
• Of those respondents who said that productivity had been negatively affected by layoffs:
—66 percent said that morale has suffered and that workers are less motivated;
—64 percent said that there is just too much work and not enough people left to do it;
—37 percent said the wrong people or departments were laid off, leaving inefficient systems and workflows; and
—36 percent said they are concerned that as the economy picks up, they won’t have the right resources to meet demand.
One surprising finding that jumped out at me: Despite the general feeling of being overworked, a majority of respondents—53 percent—said they felt the right number of people were laid off at their organization (32 percent said they felt too many were laid off, while 7 percent said not enough were let go).
“In the midst of a downturn like the one we are experiencing, the time is right for employers to re-examine existing [workforce] practices: from how work is distributed among the organization; to whether or not new hires need to be made; to what kinds of technology might enable the workforce to become more productive,” said Joyce Maroney, the director of the Workforce Institute at Kronos, in a press release about the study. “In this survey, we hear loud and clear from employees that these issues need to be addressed now, so that businesses are positioned for success when the economy kicks back into high gear.”
She makes a good point; organizations should be making changes now that will help them and their workforces rapidly recover whenever the economy starts to show some sustained improvement—even if that improvement still seems a long ways away.
But this survey also points out something else, especially from those who say that productivity has been negatively affected by so many recession-fueled layoffs: Workers everywhere are feeling disgruntled, down and maybe even depressed by all that has been going on around them. It has affected their productivity as well as their outlook on life and work, and organizations need to do something about it and do it now.
In other words, American workers have lost their mojo, as Austin Powers would say, and businesses everywhere need to be thinking about how they are going to get it back.
Never let it be said that I like to dwell only on bad news. As a longtime member of America’s workforce, I’ve been zinged, zapped and zipped by the Big, Bad Recession just like everyone else. And that’s why I am grateful for whatever positive workforce-related news that I can find.
Here’s what I’m talking about, courtesy of global consulting firm Watson Wyatt Worldwide and its latest survey on the “Effect of the Economic Crisis on HR Programs”: The number of employers planning to reverse salary cuts and freezes and restore matching contributions to 401(k) plans has increased in the past two months, according to a survey that was conducted this month with 175 large, U.S.-based employers.
Key findings include:
• Some 33 percent of employers that froze salaries plan to unfreeze them within the next six months, up from 17 percent two months ago.
• Forty-four percent say they plan to roll back salary cuts in the next six months, compared with 30 percent two months ago.
• Twenty-four percent of employers plan to reverse reductions to 401(k) match contributions in the next six months, versus 5 percent in June.
• Seventy-one percent of respondents have made some changes to their 2010 health care plan because of the economic crisis. The most commonly reported changes include increasing deductibles, co-pays or out-of-pocket maximums (41 percent) and increasing the percentage of premiums paid by the employee (40 percent).
In other words, although salary freezes may start coming off, increases in employee costs for health care benefits this year are probably going to stick around.
“Some employers are seeing the light at the end of tunnel and feeling optimistic about the prospect of improved business results,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, in a news release about the survey. “However, even as some of the program cuts are rolled back, many employees are facing smaller raises, lower bonuses and higher health care costs.”
That’s a sobering reality to keep in mind. Yes, there are signs that the recession has bottomed out and that things will start getting better, but it is going to be a long, slow climb back. We will all continue to feel the pinch for months—and as I pointed out yesterday, perhaps even many years—to come.
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