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Aon Hewitt Analysis Shows Modest Improvement in Global Employee Engagement Levels


Posted on 22 May 13 by Annie George

Though organizations around the world continue to struggle with economic volatility and uneven growth patterns following the global recession, a new analysis by Aon Hewitt, the global talent, retirement and health solutions business of Aon plc finds that overall employee engagement worldwide and employees' perceptions of their overall work experience continues to modestly improve.
Aon Hewitt's annual study of more than 2,500 organizations representing 3.8 million employees found that employee engagement levels rose to 60 percent in 2012, up from 58 percent in 2011 and 56 percent in 2010.

The way employees perceive their overall work experience also improved in 2012.

Areas with the highest increases in employee perception scores were:

  • Effective communication (+7 percentage points)
  • Business unit/division leadership (+6 percentage points)
  • Managing performance (+5 percentage points)
  • Innovation (+5 percentage points)
  • Recognition (+5 percentage points)

Engagement scores dropped in the areas of:

  • Sense of accomplishment (-3 percentage points)
  • Customers (-3 percentage points)
  • Organization reputation (-2 percentage points) 

"As global organizations grapple with competing pressures—demand for profitable growth, financial market volatility, political uncertainty and global shifts in workforce demographics—declining engagement levels may have negative, longer-term consequences on business performance," said Dr. Ken Oehler, Aon Hewitt's Global Engagement practice leader. "Engaging the right employees in the right behaviors is the critical ingredient in successfully managing through diverse economic conditions. Our research shows organizations that had higher levels of engagement relative to their peers during the economic recession also had higher growth in the years since, and we expect those firms that actively manage employee engagement today will have a better shot at growth opportunities in the future."

Engagement Levels by Region
Aon Hewitt's analysis showed 2012 engagement scores varied by region. The largest engagement increases were in Europe (improving 5 percentage points) and Latin America (improving 3 percentage points). In North America, engagement dropped slightly to 63 percent, the lowest score since 2008. Asia Pacific's engagement scores remained consistent with those from 2011.

Engagement Levels By Region

Region

2011

2012

Globally

58%

60%

North America

64%

63%

Asia Pacific

58%

58%

Europe

52%

57%

Latin America

71%

74%

Engagement by Segments

Aon Hewitt's analysis showed differences in engagement levels by job level and generation. Not surprisingly, executives and senior managers were the most engaged (66 percent), followed by middle managers, team leaders and supervisors. Professional employees, such as engineers, lawyers and nurses, had the lowest level of engagement globally, with only around 55 percent being engaged.

Substantial differences in engagement by generation were also identified. Baby Boomers had the highest level of engagement, with 65 percent engaged, followed by Generation X (58 percent) and Millennials (55 percent).

"The multicultural, multigenerational and cross-geographical world represents new challenges for leaders who are trying to drive high levels of employee engagement," said Oehler. "Understanding the differences that exist by job function, generation and job level allows organizations to identify critical gaps where they may need to invest their resources differently and also helps them better understand how they can tailor their engagement strategies to attract a specific group of people."

Call to Action – Improving Engagement Levels
The findings from Aon Hewitt's Global Employee Engagement Report signal a call to action for leaders to make employee engagement a business imperative. Past Aon Hewitt leadership research finds that engagement efforts often succeed or fail based on the level of leadership's interest, understanding and involvement in engaging employees in organizational success. Aon Hewitt believes leaders at global organizations are likely to get the highest return on investment in employee engagement if they take ownership of employee engagement and focus on improving the following drivers:

  • Career Opportunities – For the fifth consecutive year, career opportunities remained the top driver to positively impact overall engagement levels for all regions but Latin America. Yet, less than half of employees (47 percent) think they have good advancement opportunities at their organization.

    "Employers should focus on improving advancement opportunities for their high potentials and the highly engaged," said Lorraine Stomski, head of Aon Hewitt's Leadership practice. "Placing these individuals in challenging stretch assignments will keep them motivated, and it will enable organizations to put their best talent in the most impactful positions. To excel in this area, managers should have more frequent career coaching conversations with their employees."
  • Reputation – According to Aon Hewitt, just 52 percent of employees know what their organization wants to be famous for in the market, yet this is the second most important engagement driver globally. According to Oehler, without a clear and concise organizational response to this question, it is difficult to attract, retain and engage the talent needed for organizational success.

    "The reputation of an organization is a function of business performance, social responsibility and general impressions. It is also very much about what people in the job market think about an organization as a place to work," he said.
  • Pay – Globally, pay as an engagement driver has been on the rise in importance over the last two years.

    "This year's ranking has significant implications. Pay freezes and lower bonus payouts over the last few years may have begun to impact overall employee engagement," said Oehler. "It could also mean that with changing workforce demographics, hot talent wars and traditional retirement security that is either gone or at risk, the concept of loyalty to a company may be eroding. Employees may be very mercenary as job opportunities open up for higher pay."
  • Recognition – According to Aon Hewitt's analysis, employees want recognition for their performance and recognition for how difficult things have been. However, only 48 percent of employees think their employer currently recognizes this type of extra effort. "As companies continue to manage expenses and focus on growth, recognition can be very effective at motivating employees and often comes at little to no cost to the organization," said Oehler.
  • Communication – Aon Hewitt's analysis shows only half of employees around the world think their company is effective at communicating with employees. Engaging communication that tells employees about the organization, where they fit in and the path forward goes a long way in making employees feel like they are adding value and contributing to the bottom line.
  • Enabling Performance – A little over half (55 percent) of employees say they have the tools and resources needed to perform effectively in their organization. Simply removing barriers to performance, such as clarifying goals, reducing process complexity and ensuring that technology supports productivity, will help decrease anxiety, stress and frustration and fully unlock an individual's potential and performance.


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