Businesses around the world are grappling with problems caused by declining employee engagement – and British firms are no exception. Only 9% of UK employees felt engaged in their work in 2019-21, according to Gallup’s latest annual State of the Global Workforce report. Its researchers placed the country 33rd out of the 38 European states rated on this measure – a drop of two places on its 2018-20 ranking.
The lasting impact of the Covid crisis on the psychological contract between employees and employers has been one of the main factors causing this high level of disengagement, which is manifesting itself in the so-called quiet quitting trend.
Breach of contract
Unlike a formal contract of employment, the psychological contract is an unwritten (and generally unspoken) set of mutual expectations. Underpinning these is the understanding that, if an organisation invests in an employee – by providing perks, career development opportunities and a vibrant organisational culture, for instance – that person gives their all to their employer in return.
But, since the psychological contract is uncodified, it exists in a delicate state of flux and is vulnerable to socioeconomic shocks. This happened during the early months of the Covid crisis in 2020. Practically overnight, thousands of companies were obliged to shut up shop and many employees found that their work had either changed dramatically or disappeared altogether.
The social side of work also vanished, replaced by online meetings where the focus was often solely on the task at hand, rather than on building relationships and generating team spirit.
Anthony Klotz is associate professor of management at University College London. He believes that a business must first appreciate each employee’s unique experience of the past two years if it’s to repair the psychological contract.
“What’s challenging is that there isn’t a one-size-fits-all approach that will solve all your engagement issues. That’s because everyone has been experiencing the pandemic differently,” Klotz says. “Imagine that you have three people reporting to you. One may have been experiencing burnout, the second may have had an epiphany and wants to climb the career ladder, while the third may want a better work/life balance so that they can spend more time with their kids. The challenge for leaders is to understand which types of investment are likely to make each individual reciprocate with higher levels of engagement.”
A sense of detachment
If employers are to gain the insights they require to come up with suitably tailored solutions, they must communicate more effectively with their staff. The Covid crisis has loosened connections between organisations and their employees. Research by OC Tanner, a specialist in employee recognition, indicates that a third of employees feel disconnected from their leadership teams.
The widespread adoption of remote working is one reason for this. Although the hybrid work revolution is democratising employment opportunities across the country, it’s also increasing both the physical and psychological distance between employees and employers. Traditional bonding experiences such as company social events have become rarer under this new model.
Dr Ashley Weinberg, senior lecturer in psychology at the University of Salford, believes that the use of employee forums could solve some of the problems caused by remote working. He suggests that people’s contributions to these forums should be anonymised so that they feel comfortable voicing any concerns. A nominated wellbeing representative should be the conduit between the members and the senior leadership team.
If this solution is to work properly, employees must be sure that their leaders are not only listening but also able and willing to enact any suggested changes, Weinberg warns.
“There always needs to be dialogue between an employer and its employees,” he says. “Trust is at the root of the relationship. If you’re not consistent over the long term, your employees aren’t going to trust you. You can’t do something for a few months and then trail off. You must keep investing in your people’s wellbeing.”
The great resignation 2.0?
The so-called great resignation that occurred in the months after the pandemic lockdown restrictions were lifted was driven by the release of pent-up demand to move jobs as the UK emerged from the depths of the Covid crisis. There is a significant chance that history will repeat itself once the recession that’s widely expected next year eases.
In times of great uncertainty, people tend to stay with their employers to ride out the storm, although they won’t necessarily be any more engaged in their work. Once the economic outlook improves and confidence returns, they may well move again in large numbers. On the flip side, if employees are adopting a ‘wait and see’ approach as another downturn looms, it gives companies a window of opportunity to re-engage them.
Klotz believes the best way for companies to do this is by concentrating on the basics of engagement and clearly communicating how the business cares about work/life balance and recognises each employee’s contributions.
“Free beer or other perks that extend the working day are not a winning strategy. You want your employees to lead rich lives outside work; you don’t want it to be all things to them,” he argues. “But you do want employees to bring their whole selves to work. Treating them fairly will achieve this. Adopting a compartmentalised vision of work makes more sense than ever. What we’re hearing from employees is that they want their work to fit around their lives, not the other way around.”
James Reed, chairman of Reed Recruitment, agrees. He thinks that employers need to adjust their offerings in line with the economic situation and the new expectations of their employees.
“Businesses that can’t match the salaries their competitors are offering should focus on improving job satisfaction by listening to their employees’ preferences,” he advises. “This might involve offering more flexible working options, providing enhanced mental health support and expanding career development programmes.”