A Research Paper By Rob Hands, Leadership Coach, SINGAPORE
Disengaged Workforce: What to Do
According to a Gallup ‘State of Global Workplace’ report of 155 countries, only 15% of full-time employees are feeling engaged at work. Therefore, there are about 85% of employees worldwide do not feel engaged or are unhappy at work.
There are several factors that contribute to this lack of engagement amongst the workforce and the Covid-19 pandemic of 2020/21has acted as a significant catalyst in accelerating this trend. The impact of this has resulted in the need for a complete rethink of some of the traditional methods of developing and maintaining employee engagement within organizations.
Why There Is a Disengaged Workforce?
When considering why people are disengaged or demotivated there are several go-to assumptions:
Financial compensation is always an important consideration; however, this is hugely overstated as a reason for leaving an employer, usually because it provides ‘cover’ (a convenient excuse) to management for the real underlying reasons for staff quitting. It’s easier for management to justify staff resigning for more money rather than admit to the uncomfortable truth that 9 out of 10 people would take a pay cut if it meant they found their job more meaningful.
Leigh Branham, author of ‘The 7 Hidden Reasons Employees Leave’ revealed that 89% of bosses believe employees quit because they want more money. However, that is simply not true. Only 12% of employees leave an organization for more money.
A more significant and accurate contributing reason that people quit organizations is the aforementioned lack of engagement, often driven by an ever-growing dissatisfaction with their management:
A Harvard Business Review survey reveals that 58% of people say that they trust strangers more than they trust their own boss. This is a truly shocking statistic.
Some other worrying statistics include:
- 91% of employees think their managers are not good communicators (Interact-Harris).
- 83% of managers are confident that they give employees a voice within their business while 54% of employees say they don’t feel heard (Fortune).
- 71% of employees believe that their leaders do not spend enough time communicating goals and plans (Ving).
The Impact:
These statistics clearly highlight that there is a major issue with the relationship between staff and management across the global workforce.
The impact of this high level of dissatisfaction has far-reaching implications for both organizations and the broader economy. This issue has manifested itself through a meaningful drop in productivity, as shown in the below table highlighting the impact in the United Kingdom:
The Great Resignation:
In addition to this decline in productivity, dissatisfaction amongst employees has recently resulted in a significant increase in the number of resignations across the global workforce.
In June 2021 Anthony Klotz, an Associate professor of management at Texas A&M University’s Mays Business School coined the phrase ‘The Great Resignation’ to describe the record levels of people leaving their jobs, first noted in Spring 2021.
The below graph from FRED Economic Data shows the dramatic upturn in non-farm resignations since 2021:
Source: U.S. Bureau of Labour Statistics.
2021 saw a record 48 million resignations in the US alone. This was followed by an additional 4.3m in January 2022 and that trend is expected to continue into 2022 and beyond.
What Is the Issue With Management?
There is a concept known as the ‘Peter Principal’, as explained in Wikipedia below:
“The Peter principle is a concept in management developed by Laurence J. Peter, which observes that people in a hierarchy tend to rise to “a level of respective incompetence”: employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent, as skills in one job do not necessarily translate to another.
The concept was explained in the 1969 book The Peter Principle (William Morrow and Company) by Peter and Raymond Hull. (Hull wrote the text, based on Peter’s research.) Peter and Hull intended the book to be satire but it became popular as it was seen to make a serious point about the shortcomings of how people are promoted within hierarchical organizations. The Peter Principle has since been the subject of much commentary and research.
The Peter principle states that a person who is competent at their job will earn a promotion to a position that requires different skills. If the promoted person lacks the skills required for the new role, they will be incompetent at the new level, and will not be promoted again. If the person is competent in the new role, they will be promoted again and will continue to be promoted until reaching a level at which they are incompetent. Being incompetent, the individual will not qualify for promotion again, and so will remain stuck at this “Final Placement” or “Peter’s Plateau.”
Evidence:
A study in 2018 by economists Alan Benson, Danielle Li, and Kelly Shue entitled ‘Promotion and the Peter Principal’ found that companies did indeed tend to promote employees to management positions based on their performance in their previous position, rather than based on managerial potential.
They identified that high-performing sales employees were likelier to be promoted – and that they were also more likely to perform poorly as managers, leading to considerable costs to the businesses.
KC George, a partner at Bain & Co, identifies and articulates this issue below:
There is a chronic issue where people are promoted into people management roles but there is insufficient investment in training them to play the role well. The teams underneath these ill prepared managers suffer the lack of people development and seek out alternative paths with better career development, either within the company or often outside.
What Is the Solution?
A 2018 Udemy study found that nearly half of employees surveyed had quit because of a bad boss and two-thirds believed their boss lacked proper managerial training.
This leads to the conclusion that organizations should channel investment to improve the standard of their managers.
I propose, through the medium of coaching, to help organizations develop individuals to become more effective leaders and in turn help them to create a high-performing team under their leadership. See my Coaching Model: ‘ROLL’ and Power Tool: ‘From Me vs. We’, which focus on creating better leaders and shifting the mindset from thinking as an individual to leading a team. During the coaching, there is a focus on the need for trust and how to build it throughout the team, and the powerful impact it can have.
This coaching, if successful, will help to increase the motivation of employees (including the managers themselves), improve productivity, increase creativity, and reduce staff attrition. All of these result in significant savings and improved financial performance for the organizations and the broader global economy.
References
Integrity-asia.com
Leigh Branham, author of ‘The 7 Hidden Reasons Employees Leave’
Harvard Business Review
BBC & Office for National Statistics (UK)
S. Bureau of Labour Statistics.
Alan Benson, Danielle Li & Kelly Shue: Promotions and the Peter Principal
KC George, Bain & Co CIO.com
Udemy Research