“The most essential best practice is the measurement and cultivation of employee engagement,” reported U.S. Business Review. “Employee engagement is a powerful leading indicator of whether the company will be successful.”

That was in 2006. Fast-forward to 2010.

The world has suffered from a wrenching economic recession. Millions of jobs have been lost. Many people who do have jobs have gone through pay freezes, furloughs and benefit cuts. They continue to do more with less, in an atmosphere of instability.

Where does that leave employee engagement?

First, leaders need to understand the case for employee engagement has not changed, says CCL’s Bill Adams. “In good times and tough times alike, engaged employees are innovative and happier. They add value because they are more motivated to work hard, and they think and act like entrepreneurs. They will go the extra mile for the customer and the company.”

Interestingly, businesses are benefitting from a notable uptick in employee engagement during the recession — perhaps fueling the productivity and acceptance of change that have been necessary to withstand economic difficulties.

According to CCL’s 2008-2009 World Leadership Study, which sampled the opinions of 2,215 workers during the height of the economic meltdown:

  • American workers were more engaged at the height of the economic crisis.
  • The pattern of engagement was the reverse of key economic indicators.
  • The pattern of engagement resembles the pattern of mass layoffs.

Researchers found that as the Dow Jones Industrial Average fell, employee engagement rose. There also were close links between job satisfaction and layoffs. The greater the number of layoffs throughout the workforce, the more engaged employees became in their work.

While it may seem counterintuitive that people would be more engaged by their work during a time of difficulty, the study authors say that people who do not think they have a lot of job options may focus more on what their current position offers rather than on what they are not getting that other positions might give them. They perceive fewer choices and so are happier with what they have. Also, as people work harder to keep their jobs, their attitudes can change to match those behaviors. What was once considered unreasonable work hours can shift to a perspective of “doing whatever it takes” to get the work done.

But employee engagement is a fickle thing, it seems. As the economy begins to improve, the CCL research shows that 40 percent are unsure about staying in their current job. They may be engaged now, but how do their employers keep engagement high when options open up again? When employees have time to take a breath and evaluate what they are doing, why they are doing it and who they are working with, will they stay engaged and choose to remain in their current job?

“The good news for employers who are holding tight on expenses (and who isn’t?), is that worker satisfaction studies consistently rate financial compensation about eighth in workers’ priorities,” Adams explains. “More important are the nonfinancial, psychological rewards.”

Employees want to have the appropriate tools and resources. They want continuous learning opportunities. Variety, challenge and autonomy further boost their engagement.

But the decisive factor in employee engagement and retention is the boss. “The intention to stay is dramatically higher for employees who strongly agree that their managers care,” says Adams. “They want to have confidence in their boss as a leader and as someone who knows what matters to them.”

Figure 1 | Employee Engagement and Economic Conditions, 2008-2009
Figure 1 | Employee Engagement and Economic Conditions, 2008-2009

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