Crisis on Wall Street
Markets fall as fears of slump span world
Markets plunge, forcing new scramble to solve crisis

Gotcha – they’re all from 2008. But they sure sound like those published in the past week:

Second recession in U.S. could be worse than first
U.S. dollar could weaken as Fed meeting looms
Three things the Fed could do right now

If the last fifteen years are any indication, I see the latest economic turmoil panning out in one of two ways.

We could be replaying scenes from 1997 and 1998, when long-term capital management combined with the Russian debt default to reek economic havoc. Markets generally snapped back within several months however, and regained their footing with limited economic damage.

Or, we may in fact be re-living September 2008. If this is the case, then organizations should apply the lessons we have learned to survive and thrive now.

Lesson 1: Manage employee engagement in the same way you do financial capital. Engagement levels may be rebounding, but they’re still not at 2007 levels. Sustaining engagement over time is essential.

Lesson 2: Focus managers on what matters most (roles, recognition, risk, and rules) during economic uncertainty. The best executive talent managers generate as much as a 7% boost in revenue and profit performance over their less talent-focused peers. Learn more about effective talent management strategies here.

Lesson 3: Concentrate your efforts around the most critical parts of your Employment Value Proposition.

• First and foremost, only make promises you can keep. The reality is that you might have to make some changes to the organization in response to the current economic environment. An inaccurate expectation of stability is the single greatest risk to employee engagement in the current economic environment.

• The most important EVP attribute to maintain employee engagement during economic uncertainty is job-interest alignment. Give appropriate flexibility to employees on how to accomplish key organizational objectives.

• Support employee networks. Uncertainty and disruption damage employee networks—maintain (and rebuild) networks to ensure employees know who to connect with to achieve their work goals.

For the last year, CLC has been running the exit surveys of close to 100 different companies, and has collected data from more than 3,000 departing employees.

Among the more surprising findings we’ve surfaced:

- 72% of departing employees would not recommend their previous employer to their friends
- 1 out 4 employees quit their job without knowing what their next job was – simply put, they are so frustrated with their current work experience that they would rather pick no job over their current job

But one data point takes the cake:

- Former Employees are putting growth and hiring plans at the most risk. The most commonly used and most highly trusted source of information for job applicants is Former Employees. Applicants are asking people that trusted to work at a company if they should apply for a job there, and 3 out of 4 times, the answer is “No”.

That’s right: flawed.

While progress has been made at many organizations on employee engagement, engagement initiatives are not currently driving the business outcomes we’d hoped for:

Our latest research reveals that 44% of the variation in discretionary effort is not accounted for through the very common present measures of engagement.

And up to two-thirds of the variation in intent to stay is not accounted for through those same, more limited measures.

Worse yet, the vast majority (87%) of executives only measure present perceptions of employee engagement in their surveys, meaning that a lot of insight about their workforce is left on the table.

This is largely because most approach engagement as a static problem (“Are employees engaged today?”): it’s in fact a very dynamic problem that should be managed as an asset like financial capital.

Sometimes, engagement is up: Some days you arrive at work happy and things go your way across the day. You’re engaged in-the-moment for that day.

And other times, engagement is down: you’re stuck in traffic, then in back-to-back meetings, with timelines flying off the rails… It’s not such an engaging day.

The reason why most approaches today are flawed and (often) insufficient is that they measure engagement as a point-in-time “level”. Such static views do not account for past experiences and future expectations that may influence an employee’s engagement.

Establishing and sustaining engagement over time helps you understand:

• how the workforce is trending. (Are we engaged now, but also are we trending down or up?)
• what engagement strategies to pursue that not only increase engagement levels today (by creating a “spike” in-the-moment) but also that last a long time.

Future Gauge blogs will talk about ways our data and best practice research revealed how to best manage and measure Engagement Capital over time.

The Gauge covers business news and trends for HR executives on improving employee productivity and retention. Everything we cover aims to help you become a better and more informed manager. Backed by nearly 30 years of experience, we provide you with insight into the most interesting ideas, data, and discussions from our global network of HR executives, as well as ideas and views of our senior staff.

The value of our network is in sharing ideas with other executives across the globe, and sharing relevant information from our team to yours. We invite you to contact us to keep the ongoing dialogue alive.

We hope The Gauge provides you with ideas and insights to improve employee engagement at your organization.