State of Engagement: Unveiling the Latest Employee Engagement Research

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1 State of Engagement: Unveiling the Latest Employee Engagement Research

2 Mission Accelerating people to the extraordinary.

3 About the Study Every six months, Modern Survey asks 1,000 U.S. employees how they feel about the relationship they have with their employer. The respondents are full-time employees, 18 years of age or older, and work for organizations with more than 100 employees. The study asks 83 questions on the topics of employee engagement, organizational capabilities, and organizational direction. The following results are from the Fall 2013 study conducted in September.

4 Employee Engagement Engagement is the degree to which employees are psychologically invested in the organization and motivated to contribute to its success. Engagement results in discretionary effort toward attaining organizational goals.

5 Our Model Exceptional leaders (both senior leaders and direct managers) know how to leverage the drivers of engagement and normally have highly engaged employees. Those highly engaged employees provide maximum effort on the job and reach their performance potential. Poor leaders often have under engaged or disengaged employees who leave their performance potential untapped.

6 Our Model Engagement or Performance Potential is not all an organization needs to reach their performance goals. You need engaged employees who have the Capabilities to do their job and have the proper Direction to know where to apply their efforts and abilities. When you have high levels of engagement, capabilities, and direction, you have the opportunity to peak perform.

7 Fall 2013 Employee Engagement Index Willingness to Refer Percent Favorable 49 Pct Chg From March Sense of Pride Sense of Future Intent to Stay 58 0 Inspired by Company Four of the five employee engagement index items increased significantly since March Intent to Stay remained flat. Intent to Stay is the most difficult engagement item to improve. Organizations need to turn new employee enthusiasm into engagement early in new employee tenure to ensure high levels of intent to stay.

8 Fall 2013 Employee Engagement Levels 70% 60% 50% 40% 30% 34% [ 2] 27% [ 5] 26% [ 4] 20% 10% 13% [ 3] 0% Disengaged Under Engaged Moderately Engaged Fully Engaged The level of Fully Engaged employees increased by three percentage points. The level of Disengaged employees decreased by five percentage points. Disengagement is at its lowest point in the six years Modern Survey has been conducting this employee engagement study.

9 Engagement Levels (Generation) Gen Y Gen X Disengaged Under Engaged Moderately Engaged Fully Engaged 0 Disengaged Under Engaged Moderately Engaged Fully Engaged Boomers Despite popular misconceptions about the difficulty of engaging Generation Y, engagement levels between the generations are not that different Disengaged Under Engaged Moderately Engaged 11 Fully Engaged

10 Engagement Levels (Industry)* Percent Fully Engaged All Responses Financial Services Heavy Manufacturing Health Care Government / Public Adminstration Light Manufacturing Retail Trade Education Full engagement levels are, however, significantly different among various industries. Business Services, Education, and Retail Trade are well below the U.S. Workforce average. Financial Services and Heavy Manufacturing are a cut above the rest. Business Services *Industry data is a compilation of research from the last two years

11 Disengagement Levels (Industry)* Percent Disengaged All Responses 27 Nearly a third of Business Services Light Manufacturing Retail Trade Government / Public Adminstration Health Care Education Heavy Manufacturing Business Services, Light Manufacturing, and Retail Trade employees are disengaged. Financial Services *Industry data is a compilation of research from the last two years

12 Who wants to leave? All Employees Percent Actively Looking to Leave 25 Pct Chg From March Disengaged 47 0 Under Engaged Moderately Engaged Fully Engaged Despite 61% of the U.S. Workforce being Disengaged or Under Engaged only one in four employees is actively looking for a job at another organization. It is concerning that more Moderately Engaged and Fully Engaged employees are searching for their next opportunity.

13 Who wants to leave? Percent Actively Looking to Leave All Employees 25 Gen Y 34 Gen X 30 Boomers Not surprisingly, Generation Y employees over a third are more likely to be actively looking for a job at another organization. Just one in five Baby Boomers are actively looking elsewhere.

14 Drivers of Engagement 1. I Can Grow and Develop 2. Confidence in Future of Organization 3. Personal Accomplishment from Work Engagement 4. Values Guide Behavior 5. Paid Fairly for Work 6. Senior Management has Sincere Interest in Employee Well-being For the first time in three years the top driver of employee engagement is not Confidence in the Future of the Organization or Belief in Senior Leadership. The drivers of engagement may be returning to the natural state of things.

15 I am paid fairly for the work I do. % Favorable Fall 2010 Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Fair pay is the fifth strongest driver of engagement. Satisfaction with pay, at 52% favorable, is down from 54% three years ago and up from 47% a year ago.

16 I am paid fairly for the work I do. Percent Favorable All Employees 52 Males 60 Boomers Gen X Gen Y Females Satisfaction with pay is very similar across the generations. However, males are far more satisfied than females with their pay.

17 I am paid fairly for the work I do.* Percent Favorable All Responses 52 Financial Services Heavy Manufacturing Government / Public Adminstration Business Service Health Care Light Manufacturing Education Retail Trade There are huge differences among the industries when it comes to satisfaction with pay. Education and Retail Trade are well below the national average. *Industry data is a compilation of research from the last two years

18 My total compensation package is competitive in our industry. % Favorable Fall 2010 Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 Competitive Total Compensation currently at 53% favorable is significantly below the high of 58% favorable from Spring 2011

19 My total compensation package is competitive in our industry. 26 % Unfavorable Fall 2010 Spring 2011 Fall 2011 Spring 2012 Fall 2012 Spring 2013 Fall 2013 While dissatisfaction to Competitive Total Compensation has risen from about one in five employees to one in four employees.

20 My total compensation package is competitive in our industry. Percent Favorable All Employees 53 Males 61 Boomers 55 Gen X 52 Gen Y 48 Females There is little difference between the generations on satisfaction with pay, but there are differences with satisfaction on total compensation. Boomers are slightly more satisfied than Gen X and far more satisfied than Gen Y.

21 My total compensation package is competitive in our industry. Percent Favorable All Responses 53 Financial Services Heavy Manufacturing Light Manufacturing Business Services Government / Public Adminstration Health Care Retail Trade Education There are big differences between the various industries when it comes to satisfaction with total compensation, however, the differences are not as vast as the differences with fair pay. *Industry data is a compilation of research from the last two years

22 What s Next? We have a lot more to share from our study. If you want more information about employee engagement for the different genders, generations, industries, or other segments, contact us to schedule an appointment to speak with one of our representatives Modern Survey measures workforce intensity -- that fire in your company s belly that makes all things possible. Our human capital measurement software combines feedback, benchmarks, and data from enterprise systems to elucidate the correlation between employee performance and company success. We analyze the stuff your talent-management system can t -- so that you know what to do next.

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