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ADP study: what is impacting your employee engagement?

Posted by: The ADP Team on 23 December 2020 in HR, Human Capital Management

Employee engagement is really important, as we all know.

There is a real cost to organisations when employees are merely “coming to work”. For every 1% drop in full engagement, the likelihood of voluntary attrition increases by 45%1. The direct cost to organisations for each early departure ranges from a little over half the salary of a front-line worker up to nearly 2.5 times the salary of a knowledge worker or supervisor2.

In contrast, companies with a highly engaged culture perform better, with higher stock prices, higher productivity, lower turnover, and greater customer satisfaction3.

ADP Global Study of Engagement

ADP Research Institute® (ADPRI) surveyed over 19,000 workers – including both full-time and part-time workers – across the globe to measure their levels of engagement and identify what conditions at work are most likely to attract and keep workers. The below chart shows the employment status of the respondents: 

The study4 focused on aspects of engagement that organisations can actually influence rather than the myriad factors that are usually beyond an employer’s control – such as political, economic, or individual concerns.

Key findings from the study

  1. Global engagement levels have not changed much in the past three years overall, but engagement in some countries has shifted significantly.

Only about 16% of employees are “fully engaged,” and this number has not changed much since our initial study three years earlier. This means 84% of workers are just “coming to work” instead of contributing all they could to their organisations.

Location matters. Although the overall level remained stable in the latest study, we found significant variation in percent of fully engaged by country. In eight countries (Argentina, Australia, Canada, France, India, Italy, Spain, and the United Kingdom) the percent of fully engaged increased. In four countries (Brazil, China, Mexico, and the United States) the percent of fully engaged decreased.

  1. Being on a team increases engagement.

Workers who say they are on a team are 2.3 times more likely to be fully engaged than those who are not. This finding holds true within all countries in the study, and in many countries the disparity between non-team and team workers is even greater.

  1. Organisations do not understand or act on the vital power of teams.

The challenge for almost all organisations is they are not set up to know very much about their teams. Most current HR systems are extensions of financial systems and only show their reporting structure via an organisational chart. Yet, most work happens in functional teams that can be fluid, depending on the project.

When organisations make great teams their primary focus – including what creates them and what can fracture them – we expect to see more significant rises in global engagement.

  1. Trust in team leaders is the foundation of engagement.

When we examined the most engaged teams, we found that by far the best explainer of level of engagement was whether or not the team members trust their team leader.

A worker is 12 times more likely to be fully engaged if he or she trusts the team leader.

  1. Knowing what is expected and using their strengths make team members engaged.

Two Engagement Pulse statements in the survey showed the strongest relationships to a worker’s feeling of trust in his or her team leader:

At work, I clearly understand what is expected of me”

I have the chance to use my strengths every day at work”

When a leader can help team members feel clarity about expectations and communicate to them that their strengths are recognised and appreciated, these actions build trust, and a fully engaged team becomes more likely.

  1. Gig workers are engaged, especially when they are part of a team.

We looked at whether work status as a full-time, part-time, or gig worker affected an employee’s sense of engagement. Interestingly, the most engaging work status is to have one full-time job and one part-time job.

Gig-only workers who are part of a team are also highly engaged, with 21% of full-time gig workers reporting they were fully engaged.

  1. Virtual workers are more engaged; those who travel are less engaged.

In all countries and industries, virtual workers who are part of a team are more likely to be engaged (29%) than those who work in an office (18%).

Engagement is affected differently if a person is in a virtual work environment or travels for work. Those workers who reported that they travelled for work displayed the lowest levels of engagement (11%).

  1. More educated and higher-level workers are more engaged.

Workers with higher levels of education and a higher position in an organisation are both more engaged.

  1. Millennials are slightly less engaged than baby boomers.

Age does not seem to be a significant factor in engagement, contrary to our initial hypothesis: 16 percent of millennials are fully engaged, as compared to 18% of baby boomers.

  1. Women are slightly more engaged than men.

Since there are more men at higher levels in organisations, we thought men might be more engaged, but we found that gender does not make much of a difference. Globally, 17% of women are fully engaged, compared to 15% of men.

Teams are the key to engagement

Employee engagement can be complex at both the individual and organisational levels, but one overarching factor emerged from the survey: working on a team improves engagement – regardless of demographics, work status, or where someone works.

Even when functional teams are not part of an organisational chart, teams are important. It’s important for everyone, including gig workers, to regularly work with others, have a sense of belonging, and trust their leaders.

Implications for organisations  

  • Let employees work in more than one team. Teams are more significant to employee engagement than other factors. Moreover, multiple, dynamic, cross-functional teams are the most effective for fully engaged workers. Workers are 1.3 times more likely to be fully engaged while working on more than one team.
  • Gig workers are more engaged. Which means: the more organisations can make traditional work similar to gig worker – with greater flexibility and more chances to do what people love – the more they will see higher worker engagement, productivity, and retention.
  • Trust in leaders is the key to teams. When a team leader can help team members feel clarity about expectations and communicate to them that their strengths are recognised and used frequently, then trust is built and a fully engaged team become more likely.
  • Dynamic and cross-departmental team structure needs to be supported by a flexible human capital management system. Everything an organisation wants from its people – productivity, engagement, performance, innovation, inclusion – is mediated through teams. Your human capital management system should be able to show the organisational structure of dynamic teams, rather than only the chart of who-reports-to-whom. Organisations needs to understand how many teams they have, who is on which team and what is happening on the best teams, so as to be in a better position to drive productivity and engagement.

1 Nine Lies about Work: A Freethinking Leader’s Guide to the Real World, in press

2 LinkedIn, August 2013

3 Forbes, May 2017

4 Conducted in July 2018, the study repeated and amplified a 2015 study that used the same survey and sampling methodology.

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TAGS: Employee Engagement HCM Human Capital management workforce management

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