World – Employee engagement declines for the first time since 2012

By memberservices@staffingindustry.com (Danny Romero)

Employee engagement has declined across the world for the first time since 2012 due to global uncertainty, according to data from HR business Aon Hewitt.

Aon Hewitt analysed more than five million employees at more than 1,000 organizations around the world. The data showed that employee engagement dropped from 65% in 2015 to 63% in 2016. The latest data shows less than one quarter (24%) of employees are highly engaged and 39% are moderately engaged.

“The rise in populist movements like those in the US, the UK and other regions is creating angst within organisations as they anticipate the potential for a decrease in free labor flow,” Ken Oehler, Global Culture & Engagement Practice leader at Aon Hewitt, said. “Along with rapid advances in technology that are increasingly threatening job security, fewer employees are engaged and we expect this trend to continue.”

“As engagement falls, businesses can expect greater turnover, higher absenteeism and lower customer satisfaction—all factors that will significantly contribute to poor financial performance,” Oehler said.

Aon Hewitt research shows that a 5 point increase in employee engagement is linked to a 3 point increase in revenue growth in the subsequent year.

Aon Hewitt’s analysis found regional variations in engagement were driven by regional and country-specific economic, political and cultural differences.

According to Aon Hewitt, engagement for employees in Asia Pacific saw the biggest decline, dropping from 65% in 2015 to 62% in 2016. Rewards and recognition programs were ranked as a top opportunity to improve engagement by employees in Asia.

Latin America saw the largest increases in engagement, growing from 72% in 2015 to 75% in 2016. While not all countries in Latin America saw rising engagement levels, all countries remain above the global engagement rate. Mexico saw a 4% decline in engagement in 2016 while engagement for workers in Brazil rebounded eight points to 77% in 2016 after falling the previous year. Amidst the political and economic volatility and uncertainty in Venezuela, engagement was down 11 points to 69%. Latin America’s increase was followed by Africa which grew by 2%.

North America showed a 1% decrease in engagement, while Europe fell by 2%.

According to Aon, rewards and recognition ranked as the strongest engagement opportunity this year, an increase from ranking third in 2016.

“Leaders should understand that this actually reflects employees’ perceptions of fairness. While organisations may not be able to make sweeping changes to compensation, it is important that they take steps to address these sentiments” Oehler said.

Senior leadership strength and the degree of forward thinking decision-making was another top priority.

“The ability for leaders to have the personal sensitivity required to lead people and their organizations to growth is paramount in this intensely changing environment,” Oehler said.

Source:: World – Employee engagement declines for the first time since 2012