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Employee Engagement Trends 2022
Dr. Rajkumar V P
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Global HR & OD Leader I Strategic Biz Partner I Talent & Analytics Advisor I HR Transformation Leader I Trainer IWriter em Weatherford
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hr_2022_Employee_Engagement_Trends_Report.pptx
McLean & Company
© | 2022 Employee Engagement Trends McLean & Company is a research and advisory firm that provides practical solutions to human resources challenges with executable research, tools, and advice that will have a clear and measurable impact on your business. © 1997-2022 McLean & Company. McLean & Company is a division of Info-Tech Research Group Inc. Insights, analysis, and benchmarking data for McLean & Company’s Employee Engagement Survey from 2019 to 2021.
McLean & Company
© | 2022 Employee Engagement Trends 2 Like everything else in the world, employee engagement has gone through upheaval over the past two years. Employees’ relationship to their organizations shifted with the onset of the COVID-19 pandemic, remote and virtual work, and more. Employee priorities are changing, and the way organizations think about employee engagement needs to change as well. This report seeks to answer the following questions: • What impact was there on employee engagement in the immediate aftermath of the COVID-19 pandemic? How has that impact changed in the time that followed? • What impact has the explosion of remote and hybrid work had on employee engagement? • How has the competitive labor market starting in 2021 been reflected in employee engagement data, particularly key retention drivers? • What have some of the major trends and themes been in employee engagement? Key points to remember: • Knowing how other organizations are performing is not the best way to judge your own organization’s performance, but there is value in understanding broader trends occurring in the world. • Employee engagement action planning should always be based on feedback from your own employees, not from benchmark data. Executive Summary
McLean & Company
© | 2022 Employee Engagement Trends 02 Organizational Drivers 03 Job Drivers 04 Retention Drivers 01 Engagement Overview: 2019-2021 Table of Contents 3 Introduction Appendix Benchmarking Data: 2019-2021
McLean & Company
© | 2022 Employee Engagement Trends 4 How to Read This Report This report is based on data gathered from McLean & Company’s Employee Engagement Survey from January 1, 2019 to December 31, 2021. For the most up-to-date Employee Engagement data, contact your account representative for updated benchmarking information. Note: Graph totals may not add up to 100% due to rounding. Some n-counts throughout the report indicate a range of responses due to organizations who chose to omit certain questions. • 2019: 67-108 organizations, 28,537-80,600 employees • 2020: 39-83 organizations, 18,126-52,476 employees (Note: To control for factors stemming from the COVID-19 pandemic, only data collected from April to December of 2020 was included.) • 2021: 71-140 organizations, 46,267-125,788 employees Data from McLean & Company’s 2022 HR Trends Report and New Hire Survey and Employee Exit Survey databases have also been included in this report. Data was gathered from organizations primarily based in North America. Organizational size Small: 250 or fewer employees Medium: 251 to 1,000 employees Large: 1,001 or more employees Key terms used throughout this report include: Employee segments Age Tenure Gender (M/F) – only two genders were analyzed due to sample size constraints Work Style (e.g. onsite vs. remote/hybrid and field) Top-box scores A top-box score represents the percentage of respondents with a score of 5 or 6 on a 6- point scale for a question or driver.
McLean & Company
© | 2022 Employee Engagement Trends What is employee engagement? McLean & Company defines employee engagement as an overall sense of being energized by and passionate about one's work and dedicated toward one's workplace. It is important to differentiate this concept from employee satisfaction. Engaged employees feel energized, passionate, and dedicated. They are highly involved with their work and the organization. Satisfied employees feel comfortable and are generally happy that their needs are being met. Less likely to help others for the betterment of the organization Generally keep to themselves Meet minimum performance requirements Committed to the degree that their needs are met Stay at the organization because of what they get from it Stay at the organization because of what they give to it Consistently exceed performance requirements Help others for the betterment of the organization Recommend improvement opportunities Have a sense of purpose and pride in their work Characteristics Characteristics Optimal Performance Average Performance 5
McLean & Company
© | 2022 Employee Engagement Trends 6 A positive employee experience promotes strong employee engagement This highlights the emphasis organizations are placing on helping employees adjust after having been forced to change the way work gets done. Employees are increasingly expecting a work experience that fits more seamlessly into their lives. Individual employee engagement is the outcome of a strong overall employee experience (EX), which is measured using the response to a single question: “How likely would you be to recommend this organization to a qualified friend or family member as a great place to work?” As the outcome of an employee’s positive and negative work experiences, the employee experience is strongly correlated with employee engagement across all years measured (McLean & Company, Engagement Database, 2019-2021; n=50,438-121,650). Employee experience is rising in priority as a way for organizations to improve employee-engagement-related outcomes such as productivity, retention, and more. “Providing a great employee experience” jumped from 5th to 2nd in HR priorities for 2022. #2 (McLean & Company, 2022 HR Trends Survey; n=826)
McLean & Company
© | 2022 Employee Engagement Trends Employee Engagement Overview: 2019-2021 7 McLean & Company uses various measures to inform the level of engagement at an organization. Employee Experience Monitor (EXM): Measures the employee experience through an Employee Net Promoter Score (eNPS) – the difference between an organization’s percentage of supporters and percentage of detractors as measured by a single question. Engagement Levels: Measures employee engagement levels (engaged, almost engaged, indifferent, or disengaged) as indicated through the average response to the Engagement Measure Questions – rated on a scale of 1 to 6, where 1 = Strongly Disagree and 6 = Strongly Agree. Trending Questions: Measures the employee’s satisfaction with their organization and job compared to a year ago, as well as their intent to stay at the organization a year from now. In the sections that follow, this report explores three engagement drivers: Organizational Drivers: Areas that influence an employee’s satisfaction and commitment to their organization. Job Drivers: Areas that influence an employee’s happiness and commitment with their day-to-day role. Retention Drivers: Areas that influence an employee’s desire and likelihood to stay at an organization. SECTION 1
McLean & Company
© | 2022 Employee Engagement Trends 8 Employee Engagement Level Level 2019 2020* 2021 Engaged 58.7% 62.0% 60.7% Almost Engaged 21.5% 20.4% 20.6% Indifferent 9.9% 9.2% 9.4% Disengaged 9.8% 8.4% 9.3% The Employee Experience Monitor (EXM) uses the Employee Net Promoter Score (eNPS) to gauge employee engagement using a single question on a 0-10 scale: How likely would you be to recommend this organization to a qualified friend or family member as a great place to work? EXM Score 2019 2020* 2021 10.4 14.6 15.1 Responses are measured on a 6-point scale: • Engaged: 5.01-6.0 • Almost engaged: 4.51-5.0 • Indifferent: 4.01-4.5 • Disengaged: 1.0-4.0 Calculated EXM Score – = % of Detractors % of Promoters Respondents with 9-10 out of 10 Respondents with 0-6 out of 10 The full response range is -100 to 100. Scores above 0 are typically considered a positive result. *April to December of 2020 Employee Engagement scores, 2019-2021: Overall 2019-2021 Employee Engagement and Employee Net Promoter Scores
McLean & Company
© | 2022 Employee Engagement Trends Work-Life Balance Engagement Priority Matrix: 2019 Engagement Priority Matrix Overview The engagement priority matrix shows how each engagement driver performs relative to one another in terms of driver score (how positively employees view this area) and impact on engagement (how much this area influences overall engagement) on an individual level. The quadrants represent the varying levels of driver score and impact on engagement for each area and can help inform action planning: • Improve: drivers that have relatively low scores and are of high importance to engagement. • Evaluate: drivers that have relatively low scores and are of low importance to engagement. • Leverage: drivers that have relatively high scores and are of high importance to engagement. • Maintain: drivers that have relatively high scores and are of low importance to engagement. Organizational Drivers Retention Drivers Job Drivers Five out of the top seven drivers for importance to overall employee engagement are organizational drivers, with Culture ranking #1 in all years measured (2019-2021). Working Environment and Co-worker Relationships were perceived the most positively of all drivers measured, though their impact on overall engagement were lower than many drivers. This was consistent across all years (2019-2021). 9
McLean & Company
© | 2022 Employee Engagement Trends - Engagement Priority Matrix: 2020* The impact of Senior Management Relationships on engagement leapfrogged that of Department Relationships in 2020. *April to December of 2020 Benefits’ overall importance to engagement and overall satisfaction increased when compared to 2019. The remote work option was seen as a valuable perk by many employees. In 2020, Employee Empowerment, Culture, and Company Potential were still the drivers with the largest impact on engagement. The increased uncertainty surrounding a company’s future during the early days of the pandemic may have led to Company Potential’s increase in importance to overall employee engagement. Organizational Drivers Retention Drivers Job Drivers 10
McLean & Company
© | 2022 Employee Engagement Trends Engagement Priority Matrix: 2021 Despite global upheaval, the drivers most important to employees’ overall engagement did not shift significantly from 2019 to 2021. However, it’s important to remember that annual engagement surveys can mask the volatility of the employee experience on a day-to-day basis. It’s important to track employees’ in-the-moment needs through an approach such as the Employee Net Promoter Score in McLean & Company’s EXM Survey. Organizational Drivers Retention Drivers Job Drivers In general, employees viewed their relationships with their direct co- workers more positively than other relationships. These relationships can be leveraged to help improve overall engagement. The Improve quadrant (high importance, low scoring) signals a significant opportunity to plan improvements related to Department and Senior Management Relationships, as well as Company Potential. Insight 11 -
McLean & Company
© | 2022 Employee Engagement Trends Engagement significantly increased with the advent of the COVID-19 pandemic As organizations adjusted to the realities of the pandemic starting in April 2020, there was an upward shift in engagement scores compared to 2019: Full year 2019 vs. April-December 2020 Prior to the pandemic, remote/hybrid employees were more engaged than onsite employees of employees were engaged in 2020,* a 3.4% increase from 2019 % of Engaged Employees Onsite Remote/hybrid 61.4 % 69.4% This upward shift was seen in the following questions: 2019 2020* 55.3% 65.4% What was the impact on remote/hybrid and onsite employees? n=52,476 62% of employees were disengaged in 2020, a 1.5% decrease from 2019 8.4% n=35,019 3.0% n=31,295 3.4% n=36,634 5.1% increase in “I often look forward to coming to work” increase in “I am more satisfied with the organization now than I was a year ago” increase in “This organization takes actions to improve employee engagement” This trend continued into 2020 despite the large number of newly remote workers. 2019 2020* n=9,076 n=6,418 n=3,908 n=1,353 *April to December of 2020 12
McLean & Company
© | 2022 Employee Engagement Trends Increases in engagement during 2020 were generally sustained in 2021 There were few changes in engagement drivers from 2020 to 2021 and they did not likely have a large business impact. The exception to this was a dip in retention drivers scores in 2021, which reflects the challenges many organizations are facing with talent acquisition and retention in the Great Resignation. This trend will be further explored in Section 4. 61% 63% 65% 67% 69% 2019 2020 2021 Yearly Engagement Driver Scores Organizational Drivers Job Drivers Retention Drivers n=80,600 n=52,476 n=125,788 Retention is a growing area of concern Organizations who have maintained engagement progress throughout 2021 see that employees are recognizing the efforts put in to increase engagement. Now is the time to build on the progress and keep engagement high. Insight Employees viewed all engagement drivers more positively in 2020* than in 2019 *April to December of 2020 * 13
McLean & Company
© | 2022 Employee Engagement Trends Organizational Drivers Organizational drivers are areas that influence an employee’s satisfaction and commitment to their organization. Culture: The degree to which an employee identifies with the beliefs, values, and attitudes of the organization. Customer Focus: The employee’s belief in the organization’s strategy and ability to meet the customer’s needs and wants. Company Potential: The employee’s understanding and commitment to the organization’s mission as well as the employee’s excitement about the organization’s mission and future. Department Relationships: The extent to which employees from separate departments work together to get things done. Senior Management Relationships: The degree to which an employee believes senior management is trustworthy and transparent and values employee feedback/input. SECTION 2 14
McLean & Company
© | 2022 Employee Engagement Trends When it came to perceptions of Culture, no significant differences were found between onsite and remote/hybrid workers Despite the anecdotal challenges and concerns with maintaining a strong culture in a distributed workforce, Culture scores increased between 2019 and 2020 and did not change significantly between 2020 and 2021 across the entire organization. This suggests efforts to ensure remote employees feel included and connected to the organization’s mission and values are working across the board. This is positive, as the Culture driver ranks #1 in impact on engagement. Remote/hybrid work did not impact views on Culture However, responses to questions in the Department Relationships driver did show some contrast between onsite and remote/hybrid employees Onsite employees were 9.0% more likely* to agree with “Departments work well together to get things done.” than remote/hybrid employees. *4.7 percentage point difference 9.0% 2021; n=6,659-14,303 Organizations must intentionally create opportunities for cross-departmental collaboration and increase visibility of each department’s contributions. This is especially important for remote/hybrid workers who may have less exposure to other departments day to day. Insight 15
McLean & Company
© | 2022 Employee Engagement Trends Communication from executives increased during the early stage of the pandemic in 2020. This is likely the cause of increased trust and understanding between employees and the leadership team. Going forward… All questions under the Senior Management Relationships driver saw increased scores relative to the 2019 baseline: 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% Organizations must build on the improvements in communications seen during the pandemic, especially when it comes to transparency and closing the loop on or acting on employee feedback. This is particularly important because the Senior Management Relationships driver is a top-four driver in correlation with overall engagement. The CEO/President inspires me My department's executive leader inspires me The executive leadership team inspires me I trust my department's executive leader I trust the members of the executive leadership team My department's executive leader acts on employee feedback The executive leadership team acts on employee feedback I understand the rationale behind most of the decisions made by my department's executive leader I understand the rationale behind most of the business decisions made by the executive leadership team Percentage change, 2019-2021: +6.6% +5.4% +9.8% +9.3% +8.6% +7.7% +9.2% +7.4% +7.4% *April to December of 2020 Employees’ satisfaction with senior leaders increased over the past few years n=18,548-34,256 n=28,537-66,848 n=46,267-87,798 * 2019 2020 2021 16
McLean & Company
© | 2022 Employee Engagement Trends 52% 56% 60% 64% 2019 2020 2021 Senior Management Relationships Driver by Work Style Perceptions of senior manager relationships varied by segment Large organizations saw the biggest jump in senior manager relationship scores between 2019 and 2021, likely due to increased visibility, transparency, and communication from senior leaders. For large organizations to sustain momentum, or close the gaps with small and medium-sized organizations in this driver, they must continue to focus senior management efforts on instilling trust in employees. In 2020* and 2021, senior leaders may have focused more efforts on onsite employees facing greater uncertainty and health and safety concerns than they did on remote/hybrid staff. However, as the scores for the two groups show, leaders also need to focus on remote/hybrid employees who may be more prone to feeling disconnected from the organization, particularly where remote/hybrid work has become the norm. 45% 51% 57% 63% 2019 2020 2021 Senior Management Relationships Driver by Organization Size Small Mediu m n=1,790-6,737 Communication, visibility, and transparency are the keys to strong results when it comes to senior manager relationships positively impacting employee engagement. Insight n=1,079-1,882 n=4,168-8,949 n=4,445-34,547 n=2,109-14,687 n=3,400-48,074 *April to December of 2020 * * *April to December of 2020 17
McLean & Company
© | 2022 Employee Engagement Trends Job Drivers SECTION 3 Job Engagement Drivers are areas that influence an employee’s happiness and commitment with their day-to-day role. Employee Empowerment: The degree to which employees have accountability and control over their work within a supported environment. Learning and Development: A cooperative and continuous effort between an employee and the organization to enhance an employee’s skill set and expertise and meet an employee’s career objectives and the organization’s needs. Rewards and Recognition: Rewards (such as tangible and intangible gifts) and recognition that employees receive as a form of acknowledgement for a job well done. Co-worker Relationships: The extent to which colleagues, who work together but do not report to one another, get along with and support each other. Manager Relationships: The quality of the professional relationship an employee has with their manager. Manager Relationships depend on the trust that exists between these two individuals and the extent that a manager supports and develops the employee. 18
McLean & Company
© | 2022 Employee Engagement Trends Job driver scores jumped in 2020, then plateaued in 2021 n=50,357-66,187 n=26,768-35,456 n=76,813-94,088 While average job driver scores increased from 2019 to 2021, the data indicates several key areas to target for improvement Most notably, employees are much less satisfied with Learning and Development and Rewards and Recognition than other job drivers. As “Opportunities for career advancement” is the #1 reason employees leave an organization (McLean & Company, 2022 Exit Survey; n=24,605), this signals the need to provide more visibility into internal career progression opportunities and encourage development activities to improve engagement. *April to December of 2020 * 40% 50% 60% 70% 80% Employee Empowerment Learning and Development Rewards and Recognition Co-worker Relationships Manager Relationships Job Drivers 2019 2020 2021 4.4%** 6.0% 7.0% 2.2% 6.6% **percentage changes, 2019-2021 19
McLean & Company
© | 2022 Employee Engagement Trends Learning & development and rewards & recognition fall in the bottom 3 of drivers On average, Learning and Development (L&D) and Rewards and Recognition were both ranked among the lowest three drivers from 2019 to 2021 (McLean & Company, Engagement Database; n=30,830-84,873). 3-year average top-box score 3-year average top-box score 54.3 % 52.1% Learning and Development Rewards and Recognition Employees with less than one year of tenure were 14.5% more satisfied with L&D than employees with five to ten years of tenure As satisfaction drops over time, providing meaningful continuous learning opportunities for employees at all stages of their careers is critical. Address this with an L&D strategy: having a strategic approach to L&D is associated with improved organizational performance and HR effectiveness, along with engagement (McLean & Company, 2022 HR Trends Survey; n=379-387). Employees working at small organizations were 22.5% more likely* than those in large organizations to agree with the statement “Promotions in my department go to those who deserve them the most” *10.6 percentage point difference Being transparent with how rewards and promotions are determined may be more challenging as organizations grow, but it is an important factor in engagement. Organizations should dedicate the necessary time and resources to being transparent about how and why employee contributions are being rewarded. The correlation between praise and engagement increased year over year from 2019 to 2021 (“I am praised when I go above and beyond the call of duty”). This signals a need to frequently review and renew Rewards and Recognition efforts to help drive engagement and to instill a culture of recognition and appreciation. n=4,167- 13,102 n=1,857- 51,557 20
McLean & Company
© | 2022 Employee Engagement Trends The impact of work style on relationships cannot be overlooked There are significant differences and trends in how onsite and remote/hybrid employees perceive manager and co- worker relationships “I have a good friend at this organization” “My manager cares about me as a person” n=978-11,854 n=645-9,012 *April to December of 2020 * Onsite employees’ satisfaction with Manager Relationships jumped in 2020* The emphasis placed on the health, safety, and wellbeing of onsite employees shown by many managers and organizations in the early days of the pandemic likely contributed to this change. The drop in 2021 suggests that managers must continue to strengthen relationships with their employees and demonstrate that their support extends beyond times of crisis. The dip in 2021 in how remote/hybrid employees perceive Co- worker Relationships may be driven by the many newly hired remote/hybrid employees Employees who shifted to remote work in 2020 could rely on relationships previously built in-person. The decrease in these scores for 2021 may be attributed to new hires struggling to develop relationships with their co- workers in a virtual environment. At the same time, Co-worker Relationships scores for onsite employees returned to approximately their pre-pandemic baseline. 21 62% 67% 72% 77% 2019 2020 2021 Onsite vs. Remote/Hybrid: Co-worker Relationships Onsite Remote/hybrid 74% 78% 82% 86% Onsite vs. Remote/Hybrid: Manager Relationships
McLean & Company
© | 2022 Employee Engagement Trends Work style is also impacting other job drivers such as empowerment and L&D “If I make a suggestion to improve something in my department, I believe it will be taken seriously” “In the last year, I have received an adequate amount of training” n=1,155-12,353 n=1,075-8,741 *April to December of 2020 * Satisfaction between onsite and remote/hybrid employees diverged in 2020 and 2021 Remote/hybrid workers may have felt they needed training on how to communicate and collaborate effectively in a virtual environment and on leveraging new tools and technologies to efficiently complete tasks. This may also be an indication of some organizations’ reliance on in- person training or may represent an undercurrent of employee dissatisfaction at the need to upskill or reskill to adjust to the virtual environment. Accountability and control over one’s work were apparent challenges with transitioning to a virtual environment While leaders were communicating downward in 2020, newly remote/hybrid employees may have found it difficult to influence positive changes, resulting in a drop in scores. This trend continued into 2021, indicating the need for leaders to provide more opportunities for upward communication from employees. Remote/hybrid employees were more satisfied with Employee Empowerment and L&D than onsite employees in 2019 but viewed each driver less positively through 2020* and 2021 22 48% 52% 56% 60% 2019 2020 2021 Onsite vs. Remote/Hybrid: L&D Onsite Remote/hybrid 63% 66% 69% 72% Onsite vs. Remote/Hybrid: Employee Empowerment
McLean & Company
© | 2022 Employee Engagement Trends Retention Drivers SECTION 4 Retention Drivers are areas that influence an employee’s desire and likelihood to stay at an organization. An organization cannot get to engagement without satisfying a minimum requirement in these areas. Compensation: The level of fairness an employee attributes to their compensation given the work they do and what they could make elsewhere in a similar role. Benefits: Employees’ perspective of the competitiveness of an organization’s health benefits and additional perks (e.g. gym memberships, provided meals and snacks, and discounts). Work-Life Balance: The extent to which employees feel they can balance their work and personal life and manage their work stress. Working Environment: The extent to which employees feel physically and emotionally safe in their workplace. 23
McLean & Company
© | 2022 Employee Engagement Trends Despite improvements in 2020, retention scores returned to pre-pandemic levels in 2021 Perspectives on retention driver questions varied by employee segment: Improvements in Compensation and Benefits scores and steady Working Environment and Work-Life Balance scores despite the rapid pace of change contributed to higher engagement during the early part of the pandemic. However, in 2021 the increased scores in Compensation and Benefits returned to their pre-pandemic baseline. Retention drivers do have an impact on engagement, though it is relatively low compared to other drivers. However, their impact on retention is high. Moving forward, organizations need to focus their efforts on improving retention drivers to help alleviate the turnover challenges that began in 2021 and have continued into 2022. Males consistently agreed that they are not discriminated against or emotionally harassed at work more than females did (2019-2021; n=8,267-29,372) The discrepancy between genders calls out the need for organizations to reinforce DEI as a priority and ensure all employees feel safe in their workplace. 45+ Employees aged 45 and older viewed work-life balance more positively than younger employees (2021; n=34,726-41,016) This signals a need to uncover the root causes of this discrepancy, such as unclear work boundaries and a lack of employee empowerment for younger employees. *April to December of 2020 30% 50% 70% 90% Compensation Benefits Working Environment Work-Life Balance Retention Driver Scores 2019 2020 2021 * n=38,970-60,951 n=21,030-32,957 n=63,969-93,122 **percentage changes, 2019-2020 9.1%** 10.3% 1.1% 0.8% 24
McLean & Company
© | 2022 Employee Engagement Trends Changing work conditions brought on by the pandemic are no longer unique 50.8% 61.5% 47.9% 55.8% 40% 48% 56% 64% Compensation Benefits 2020 2021 With tight labor markets and increased ability to explore jobs beyond previous geographical boundaries contributing to increased turnover, some organizations have turned to increased Compensation and Benefits to attract and retain talent. Regardless, employee satisfaction with these drivers decreased. While economic conditions (e.g. high inflation) can partially explain the change, there is still work to be done to understand and address the root causes of the drops and to communicate the organization’s efforts, such as through an employee value proposition. -9.2% -5.6%** Compensation and Benefits Driver Scores n=77,838 8.9% decrease in “My benefits are competitive with similar jobs I might find elsewhere” (percentage difference, 2020-2021) * *April to December of 2020 n=21,030-23,462 n=69,086-71,263 McLean & Company, 2022 HR Trends Report; n=394 Organizations report increasing salaries and benefits: 25% 43% Increased benefits Increased salaries The drop in Benefits scores from 2020 to 2021 may be explained by increased awareness of unique benefits and perks beyond traditional health coverage offered by competing organizations. It may also be that the impacts of the pandemic have increased both the need for, and expectations of, expanded benefits packages. Continuous evaluation and updates of retention efforts will be required to keep on top of these trends. Just as many employees now expect flexible work arrangements, their definition and expectations of benefits have broadened. **percentage changes, 2020-2021 25
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© | 2022 Employee Engagement Trends 59% 64% 69% 74% 2019 2020 2021 Onsite Remote/Hybrid * Onsite vs. Remote/Hybrid: Work-Life Balance Work-life balance is becoming a challenge in the new world of work While workplace flexibility comes with many benefits, longer work hours jeopardize wellbeing Despite the anticipated benefits of ongoing flexibility, remote/hybrid employees’ ability to maintain Work-Life Balance in 2021 returned to pre-pandemic levels: *April to December of 2020 of organizations reported increased working hours, while 80% reported an increase in flexibility (McLean & Company, 2022 HR Trends Report; n=394) Longer hours can contribute to stress and burnout, which is a threat to employee engagement and retention. With careful management (e.g. setting clear expectations and establishing manageable workloads), flexible work arrangements can increase and sustain engagement and productivity at an organization. Organizations were especially accommodating in 2020, which could explain the initial spike seen in Work-Life Balance. As remote work became the norm in 2021, employees are realizing that this work style brings its own challenges, such as a lack of separation between personal and workspace. n=1,025-13,687 Organizations need to get creative about how they support employees and revisit their efforts to promote all aspects of wellbeing. Mental wellbeing must be a particular focus as longer work hours may add to workload pressures and lead to employee burnout. Insight 62% 26 “I am able to maintain a balance between my work and personal life”
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© | 2022 Employee Engagement Trends What Comes Next? Actions and Practical Resources Use McLean & Company’s diagnostic products to shed light on employee engagement, experience, retention, DEI, and more. Retention drivers are always among the lowest scoring in employee engagement data, but that doesn’t mean we should accept low scores. In today’s competitive labor market, it’s crucial to create an effective talent retention plan. As salaries and benefits increase and employees’ perception of them continues to be negative, it is time to focus on how rewards are communicated, whether that’s through a strategic project like creating an employee value proposition, a tactical project like total rewards statements, or training for managers on how to have conversations about pay. The data shows that engagement differs for onsite and remote/hybrid employees. Prepare managers to lead in a hybrid work environment to minimize the impact of the new working environment on engagement. Work-life balance and burnout are becoming a challenge in today’s work environment, so take the time to revisit your wellbeing offerings. It is a complex undertaking to understand the impact of the social, economic, and cultural upheaval of the past several years on employee engagement. The averages of annual surveys can mask the volatility of the day-to-day employee experience, which shows the importance of combining more frequent measurements than just the annual engagement survey. Meanwhile, the engagement of different employee groups and demographics can also be lost in averages. It’s crucial to use engagement data as a starting point rather than the end of the conversation. Dig deeper into the concerning trends and themes that emerge from your engagement data and address them using the practical resources available through McLean & Company. 27
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© | 2022 Employee Engagement Trends 28 Engagement Drivers (2019-2021) 2019 2020* 2021 Net change (2019-2021)** Organizational Drivers Culture 72.7% 76.1% 75.0% +2.3 Customer Focus 66.2% 70.3% 69.7% +3.5 Company Potential 65.1% 69.4% 68.7% +3.6 Department Relationships 61.8% 63.9% 64.4% +2.6 Senior Management Relationships 54.9% 59.3% 59.2% +4.3 2019 2020* 2021 Net change (2019-2021) Job Drivers Employee Empowerment 68.9% 71.8% 71.9% +3.0 Learning And Development 52.3% 55.2% 55.5% +3.2 Rewards And Recognition 50.1% 52.7% 53.6% +3.5 Co-worker Relationships 76.8% 79.0% 78.5% +1.7 Manager Relationships 68.6% 72.6% 73.1% +4.5 2019 2020* 2021 Net change (2019-2021) Retention Drivers Compensation 46.6% 50.8% 47.9% +1.3 Benefits 55.7% 61.5% 55.8% +0.1 Working Environment 84.8% 85.7% 86.1% +1.3 Work-Life Balance 62.8% 63.3% 62.6% -0.2 n= 38,970-66,187 responses, 72-95 organizations n=21,030-35,456 responses, 46-64 organizations n=62,211-94,088 responses, 89-117 organizations *April to December of 2020 ** Percentage point difference Legend for year over year change: : Increased : Decreased : Similar (<=0.5% difference)
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© | 2022 Employee Engagement Trends 29 Gender comparisons (2019-2021) Engagement Level Gender (M/F) 2019 2020* 2021 Net change (2019-2021)** Engaged Female 58.2% 63.6% 62.6% +4.4 Male 59.0% 61.6% 60.8% +1.8 Almost Engaged Female 21.5% 19.9% 20.3% -1.2 Male 21.4% 20.0% 20.5% -0.9 Indifferent Female 10.0% 9.1% 8.8% -1.2 Male 9.8% 9.6% 9.3% -0.5 Disengaged Female 10.3% 7.4% 8.2% -2.1 Male 9.8% 8.7% 9.3% -0.5 n=34,107-42,197 responses, 96 organizations n=18,157-25,890 responses, 72-73 organizations n=44,579-59,013 responses, 110-111 organizations *April to December of 2020 ** Percentage point difference Legend for year over year change: : Increased : Decreased : Similar (<=0.5% difference)
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© | 2022 Employee Engagement Trends 30 Tenure comparisons (2019-2021) 2019 2020* 2021 Less than 1 year 1 year to less than 3 years 3 years to less than 5 years 5 years to less than 10 years 10 years to less than 20 years 20+ years Less than 1 year 1 year to less than 3 years 3 years to less than 5 years 5 years to less than 10 years 10 years to less than 20 years 20+ years Less than 1 year 1 year to less than 3 years 3 years to less than 5 years 5 years to less than 10 years 10 years to less than 20 years 20+ years Engaged 63.0% 56.1% 55.0% 58.8% 60.6% 60.5% 67.8% 60.7% 59.6% 63.0% 64.3% 68.4% 66.6% 59.5% 58.4% 59.1% 61.6% 65.4% Almost Engaged 19.5% 22.7% 22.3% 20.9% 22.2% 20.6% 19.1% 21.1% 21.0% 20.5% 20.0% 17.7% 17.7% 20.9% 21.4% 21.2% 21.1% 20.1% Indifferent 9.0% 10.5% 11.8% 10.6% 9.0% 9.7% 6.8% 9.5% 10.4% 8.8% 8.9% 7.3% 8.1% 9.3% 10.4% 9.9% 9.0% 7.7% Disengaged 8.4% 10.8% 11.0% 9.8% 8.2% 9.2% 6.3% 8.7% 9.0% 7.7% 6.8% 6.6% 7.7% 10.3% 9.8% 9.8% 8.3% 6.8% n=8,117-14,835 responses, 55-89 organizations n= 4,937-10,823 responses, 47-69 organizations n= 9,346-23,824 responses, 90-123 organizations Engagement Level *April to December of 2020
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© | 2022 Employee Engagement Trends 31 Age comparisons (2019-2021) 2019 2020* 2021 Younger than 25 25-34 35-44 45-54 Older than 54 Younger than 25 25-34 35-44 45-54 Older than 54 Younger than 25 25-34 35-44 45-54 Older than 54 Engaged 49.7% 51.5% 59.3% 62.1% 66.4% 53.3% 53.5% 61.5% 66.2% 70.0% 49.8% 52.4% 60.6% 64.9% 69.7% Almost Engaged 23.4% 22.8% 22.7% 20.3% 18.6% 23.9% 22.8% 21.8% 19.1% 16.3% 21.6% 23.2% 21.0% 20.1% 16.8% Indifferent 11.1% 12.7% 9.4% 9.4% 7.4% 11.5% 12.8% 9.2% 7.6% 7.5% 12.6% 11.5% 9.7% 7.9% 6.8% Disengaged 15.8% 13.0% 8.7% 8.3% 7.5% 11.3% 10.9% 7.5% 7.1% 6.2% 16.0% 12.8% 8.7% 7.1% 6.7% n=3,221-17,801 responses, 54-88 organizations n=3,583-10,410 responses, 42-63 organizations n=6,439-24,292 responses, 69-116 organizations Engagement Level *April to December of 2020
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© | 2022 Employee Engagement Trends 32 Work style comparisons (2019-2021) Engagement Level Work Style 2019 2020* 2021 Net change (2019-2021)** Engaged Onsite 55.3% 61.4% 59.7% +4.4 Remote/hybrid 65.4% 69.4% 60.7% -4.7 Almost Engaged Onsite 23.1% 21.6% 21.8% -1.3 Remote/hybrid 17.4% 15.0% 19.6% +2.2 Indifferent Onsite 10.3% 8.5% 9.0% -1.3 Remote/hybrid 8.6% 9.1% 10.1% +1.5 Disengaged Onsite 11.4% 8.5% 9.6% -1.8 Remote/hybrid 8.6% 6.5% 9.6% +1 n=3,908-9,076 responses, 16-20 organizations n=1,353-6,418 responses, 12-16 organizations n=6,893-12,449 responses, 20-23 organizations *April to December of 2020 ** Percentage point difference Legend for year over year change: : Increased : Decreased : Similar (<=0.5% difference)
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© | 2022 Employee Engagement Trends 33 Organization size comparisons (2019- 2021) 2019 2020* 2021 Small (<=250 employees) Medium (251-1,000 employees) Large (>1,000 employees) Small (<=250 employees) Medium (251-1,000 employees) Large (>1,000 employees) Small (<=250 employees) Medium (251-1,000 employees) Large (>1,000 employees) Engaged 61.3% 57.6% 54.9% 64.0% 60.4% 62.6% 63.2% 59.3% 59.9% Almost Engaged 20.3% 22.5% 22.5% 19.8% 20.9% 20.1% 20.4% 21.3% 20.2% Indifferent 9.3% 10.0% 11.0% 9.2% 9.5% 8.8% 7.9% 10.2% 9.6% Disengaged 9.1% 9.8% 11.6% 7.0% 9.2% 8.4% 8.5% 9.2% 10.4% n=5,430-60,428 responses, 27-46 organizations n=3,005-32,901 responses, 20-25 organizations n=4,511-97,141 responses, 38-41 organizations Engagement Level *April to December of 2020
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© | 2022 Employee Engagement Trends McLean & Company is the trusted partner of HR and leadership professionals around the world. Our memberships are designed to provide what you need to drive the organization forward – from full-service assessments to practical action plans, impactful training, and more. When you pair our comprehensive resources with our collaborative services, there's nothing between you and your goals. As a partner, we listen first to understand your situation, then guide you through each step of the way so you get where you want to be, faster and with confidence. At McLean & Company, we’re passionate about empowering leaders like you to shape a workplace where everyone thrives. McLean & Company is a division of Info-Tech Research Group Inc. London, ON Corporate Headquarters 345 Ridout Street North London, Ontario, N6A 2N8 Toronto, ON 888 Yonge Street Toronto, Ontario, M4W 2J2 Las Vegas, NV 3960 Howard Hughes Parkway, Suite 500 Las Vegas, NV, USA, 89169 Sydney, Australia Level 4, 20 Hunter Street Sydney, NSW, Australia 2000 North America: 1-877-281-0480 International: +1-519-936-2659 mcleanco.com 34
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© | 2022 Employee Engagement Trends 35 Diagnostics and consistent frameworks are used throughout all four options. DIY Toolkit “Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.” Guided Implementation “Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.” Workshop “We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.” Consulting “Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.” McLean & Company offers various levels of support to best suit your needs
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© | 2022 Employee Engagement Trends Understand their team’s Engagement Report and prepare for their team discussion. Feel clear and confident about how to act on Engagement Report results. Increase self-awareness and identify their role in improving team engagement. Employee Engagement Coaching How It Works This virtual coaching is available for groups of 10+ leaders in your organization. After completing McLean & Company’s Employee Engagement Survey, each leader will receive three 50-minute 1:1 sessions with a trained coach. This four-month program can be supplemented with additional sessions in year two for an additional fee. This coaching is offered to clients that use our Employee Engagement Survey. YEAR 1 YEAR 2* *Coaching program fees are billed annually Equip your leaders with everything they need to succeed with engagement action planning. Our trained coaches work one on one with your leaders in a confidential environment to accelerate their confidence, self-awareness, and development. When survey launches Engagement Survey Session 1 Session 2 Session 3 Within 2 weeks of results being provided to leaders After team focus groups (or about 4 weeks later) 3 months after Session 2 Option A: 3 additional coaching sessions based on 2nd year engagement survey results. Option B: Further leadership coaching based on the results of a 360- feedback survey.
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© | 2022 Employee Engagement Trends HR Stakeholder Management Survey Align HR initiatives with business strategy and stakeholder needs. HR Management & Governance Improve HR’s core functions and drive project success. Optimize the HR Department for Success Improve Employee Experience and HR Processes Employee Engagement Move beyond measuring job satisfaction with a comprehensive view of engagement. McLean Employee Experience Monitor Evolve to leader-driven engagement with a real-time dashboard and results. New Hire Survey Ensure recruiting and onboarding programs are effective by surveying new employees. Employee Retention Pulse Survey Identify warning signs for regrettable turnover. Diversity, Equity & Inclusion Engagement Pulse Take a thoughtful approach to mobilize inclusion efforts across your organization. Employee Exit Survey Understand why people leave the organization to proactively retain top talent. 360 Feedback Empower employees with a holistic view of their performance to prioritize development. Build a Data-Driven Strategy Using Full-Service Diagnostic Programs 37
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© | 2022 Employee Engagement Trends Leadership Membership The Leadership Membership Difference This membership will give you the tools you need to push your HR department further, faster. Complete major projects with the help of a dedicated Executive Advisor who is a former HR leader. You’ll get a dedicated Executive Advisor, who is a former HR leader with deep experience across many research areas. They will help you identify strategic initiatives, prioritize projects, mitigate challenges, direct you to the relevant research or subject matter experts, and keep you on track. We recommend you meet at a minimum quarterly for a touch point, in addition to the unlimited advisory calls while working with our SME advisory team, with flexibility to leverage additional touch points and select advisory calls with your Executive Advisor as you work toward delivering key initiatives. Boost your own development with one 360 Feedback personal evaluation, including one debrief session and a separate development planning session. Your choice of one ticket to McLean & Company’s Signature Conference or one ticket to our virtual Elevate HR strategic leadership development course. Ideally, we’d like you to benefit from these events, although the ticket could be transferred to a colleague. Leverage the expertise of fellow senior HR leaders in Quarterly Leadership Peer-to-Peer Roundtables. These 60-minute, facilitated discussions are an opportunity to network and collaborate in an open, honest, and inclusive virtual space. Save money and obtain peace of mind from our HR technology vendor management and contract review services. This helps you assess, manage, and reduce costs while strengthening vendor relationships. 38
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© | 2022 Employee Engagement Trends Counselor Seat Services The Counselor Membership Difference Features: You’ll get a dedicated Executive Counselor who is a former Senior HR Executive and has been in your shoes. You will benefit from two online advisory sessions throughout the year (along with unlimited scheduled and ad hoc phone calls), which integrate your Executive Counselor as a trusted part of your professional support network. Use these meetings to cover anything you’d like, from prioritizing your own development to working through a project. Your Executive Counselor can help you navigate board or executive-level challenges and prepare for meetings. You’ll get access to cutting edge IT research via our IT division, Info-Tech Research Group. Your dedicated Executive Counselor will provide a high-touch-point, customized experience to help you develop yourself and your team while increasing your personal and functional strategic impact. The McLean Membership serves your firm; the Counselor membership serves you personally. Your customized Personal Leadership Development Plan created with your trusted Executive Counselor will link to your personal and organizational goals and values. You’ll develop a custom, authentic Leadership Brand that allows you to thrive and better market your unique value proposition. Network and collaborate with fellow senior HR leaders in Quarterly Leadership Peer-to-Peer Roundtables. Your choice of a ticket to McLean & Company’s Signature Conference or to our virtual Elevate HR strategic leadership development course for a total of two tickets. Protect your organization and save money with expert HR technology contract review and price benchmarking & negotiation. Leverage your personal Executive Counselor to make your personal and professional development a priority. Plus all the benefits of a Leadership Membership such as: 39
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© | 2022 Employee Engagement Trends 40 Develop managers and your HR team with our learning solutions Develop your managers with our varied, interactive, remote training sessions. Sample topics include: • Master the 3i’s of Employee Engagement • Build High-Performing Teams • Master Difficult Conversations • Emotional Intelligence in Leadership • Lead Through Change • Manage Remote Teams • Give Effective Feedback and Coaching • Systems Thinking Elevate HR Online A blended learning program designed to develop a strategic HR mindset and help HR practitioners better respond to the growing complexity of the workplace of the future. Management Fundamentals Online A practical, interactive, and impactful blended learning program designed to develop foundational management capabilities. McLean Academy A self-paced eLearning program for HR professionals. The curriculum is built around McLean's HR framework and provides practical, outcome- driven advice on tackling HR initiatives.
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is the trusted partner of HR and leadership professionals around the world. Our memberships are designed to help leaders drive their organization forward. 1997-2022 © McLean & Company. McLean & Company is a division of Info-Tech Research Group Inc.
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