The worms are turning

Employees are expected to pull together, with two thirds working unpaid overtime. But half say that this work level is unsustainable, and UK organisations risk brain drain as disgruntled staff plot upturn escape.

UK employees have stretched themselves to the limit to get their organisations through the recession, yet employee engagement is significantly below normal, new research by global management consultancy Hay Group reveals.

As the economy improves, some UK organisations will face a talent exodus of disengaged employees, overstretched and under-rewarded in the recession, the research warns. The study, The Loyalty Deficit, of 1000 front line employees also reveals how some employers have broken an unwritten ‘contract' with staff, jeopardising loyalty, commitment and ultimately firms' ability to rebound out of recession.

Two thirds (65 percent) of employees are currently working over and above contracted hours and over a third (36 percent) have increased the amount of overtime they put in over the past 12 months. The average amount of unpaid overtime workers are currently clocking up is six hours per week, almost an extra day.

For now, this extra time is being put in willingly as workers pull together. The vast majority (85 percent) of those working unpaid overtime are committed to helping their organisation survive the recession, while 84 percent say that people in their team are willing to go beyond their normal responsibilities to help each other out.

However, half (50 percent) of these employees warn that this level of work is unsustainable.

Seven out of ten (70 percent), claim that overwork is having a negative impact on their relationships and family life, whilst a similar proportion (76 percent) complain it is affecting their general health and wellbeing.

Despite this apparent ‘Dunkirk spirit' among frontline workers, employee engagement levels stand significantly below normal levels, 59 percent against normative levels of 72 percent*, whilst more than a third of employees (36 percent) are ‘unhappy' in their current role. Approaching a third (30 percent) rate their organisation as a worse place to work compared to 12 months ago.

Russell Hobby, Associate Director at Hay Group, explained: "Walking around the office, leaders may feel the warm glow of a ‘Dunkirk spirit' among teams battling through the recession together.

"However, managers should beware of superficial engagement, where levels of effort and staff retention are artificially inflated by redundancy fears and a soft employment market, rather than genuine loyalty to the firm.

"Those companies solely focused on the bottom line during the recession could easily fail to notice the debt they have built up with employees for their loyalty during tough times. They risk falling behind those few organisations that have bucked the trend and successfully kept engagement high."

The Hay Group research shows that some workers are only staying with employers due to an uncertain jobs market, and warns of an imminent talent exodus from organisations that fail to re-engage their employees before the economy revives.

The majority (53 percent) of employees describe working under a ‘climate of fear' for their jobs. One third (33 percent) of workers are actively looking for a new job, and nearly half (47 percent) plan to leave in the next two years.

Of those planning to stay in their role for at least another year, over four fifths (88 percent) attribute this to a lack of vacancies elsewhere, whilst 92 percent fear the risk of starting a new job in the current economic climate. However, approaching half (41 percent) say they are more likely to leave their employer with an improvement in the economic environment.

Russell Hobby commented: "If the 47 percent of employees planning to leave their jobs over the next two years carry out their intention, this would be a 16 percent increase in UK average employee turnover levels. With the average cost of replacing an employee said to be £6,125 this suggests that low employee engagement in the recession could cost the UK economy an additional £17.4 billion."

"As the economy warms up, leaders will notice a trickle of talent draining from their organisations that could quickly turn into a torrent if they do not act now to re-establish trust, and provide a vision for the new business world."

The study warns that some employers have broken their psychological contract with employees, by leaning too heavily on them for too long during the recession whilst giving little in return. Around two fifths (39 percent) of workers feel their employers have broken an unspoken contract of loyalty with their staff over the past 12 months.

Nearly half (46 percent) no longer have faith in their employer, whilst approaching half (45 percent) are now less proud to work for their organisation compared to a year ago; 46 percent are less inclined to recommend it as a place to work to friends or family. Consequently, the vast majority (91 percent) of workers claim they "work to live" rather than "live to work", 16 percent of which say this has changed in the last 12 months.

Russell Hobby commented: "Hay Group research shows that firms with an actively engaged workforce on average achieve two and a half times greater revenue growth than those with low employee engagement.

"This not only represents a huge missed opportunity to companies that don't engage their employees, but their ability to respond quickly and decisively to the upturn will also be greatly impeded without staff on side."

13 November 2009