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Employee Engagement Declining Across the Globe

Employee Engagement Declining Across the Globe

Aon Hewitt survey finds global uncertainty driving employee skepticism

Globally, employee engagement declined for the first time since 2012, according to a new report from Aon Hewitt, the talent, retirement and health solutions business of Aon plc (NYSE:AON).

According to Aon Hewitt’s analysis of more than five million employees at more than 1,000 organizations around the world, employee engagement dropped from 65 percent in 2015 to 63 percent in 2016. Less than one quarter (24 percent) of employees are highly engaged and 39 percent are moderately engaged.

“The rise in populist movements like those in the U.S., the U.K. and other regions is creating angst within organizations as they anticipate the potential for a decrease in free labor flow,” explained Ken Oehler, Global Culture & Engagement Practice leader at Aon Hewitt. “Along with rapid advances in technology that are increasingly threatening job security, fewer employees are engaged and we expect this trend to continue.”

Employee Engagement Since 2011

2016 63%
2015 65%
2014 62%
2013 60%
2012 58%
2011 59%

According to Aon Hewitt, improving engagement can pay dividends. Aon Hewitt research shows that a 5 point increase in employee engagement is linked to a 3 point increase in revenue growth in the subsequent year.[1]

“As engagement falls, businesses can expect greater turnover, higher absenteeism and lower customer satisfaction—all factors that will significantly contribute to poor financial performance,” stressed Oehler.

Regional Differences

Aon Hewitt’s analysis found regional variations in engagement were driven by regional and country-specific economic, political and cultural differences.

According to Aon Hewitt, engagement for employees in Asia Pacific saw the biggest decline, dropping from 65 percent in 2015 to 62 percent in 2016. Rewards and recognition programs were ranked as a top opportunity to improve engagement by employees in Asia.

Latin America saw the largest increases in engagement, growing from 72 percent in 2015 to 75 percent in 2016. While not all countries in Latin America saw rising engagement levels, all countries remain above the global engagement rate. Mexico saw a four percentage point decline in engagement in 2016 (79 percent in 2015, compared to 75 percent in 2016), while engagement for workers in Brazil rebounded eight points to 77 percent in 2016 after falling the previous year. Amidst the political and economic volatility and uncertainty in Venezuela, engagement was down 11 points to 69 percent.

Region 2016 2015
Asia Pacific 62% 65%
Latin America 75% 72%
North America 64% 65%
Europe 58% 60%
Africa 61% 59%

Top Global Engagement Opportunities

According to Aon, rewards and recognition ranked as the strongest engagement opportunity this year, a significant jump from ranking third in 2016.

“Leaders should understand that this actually reflects employees’ perceptions of fairness. While organizations may not be able to make sweeping changes to compensation, it is important that they take steps to address these sentiments.”

Not surprisingly, senior leadership strength and the degree of forward thinking decision-making was another top priority. “The ability for leaders to have the personal sensitivity required to lead people and their organizations to growth is paramount in this intensely changing environment,” added Oehler.

To learn more about Aon Hewitt’s Trends in Global Employee Engagement report, visit: www.aon.com/engagement17

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