Ideas for Leaders #013

Keeping Employee Engagement High in Tough Times

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Key Concept

During a downturn, employee engagement increases rather than decreases. However, employers should implement strategies to keep engagement high so the reverse does not occur when economic conditions eventually improve.

Idea Summary

It is useful for us to analyse levels of employee engagement in organizations both during and in post-recession environments. Here we can define ‘engagement’ as satisfaction with job and commitment to the organization.

It would seem likely that a workforce would be less engaged in their work - as well as less happy overall - in the face of mass layoffs, pay freezes, cuts in benefits, with fewer people to do the same work and with general instability.

However, using data from the Center for Creative Leadership’s (CCL®) World Leadership Survey, we can see that in America, employee engagement actually increased when the Dow Jones Industrial Average (DJIA) was down and layoffs were up, i.e. the peak of the economic crisis. The assumption then that work engagement decreases during difficult economic conditions is not always an accurate one.

One explanation is the effect of employees’ perceived job mobility: when people believe they have a choice among many employment options, they may feel less committed to and satisfied with their current position. This explanation is consistent with a finding in psychology that is sometimes referred to as ‘the paradox of choice.’

The issue businesses face now is not what to do to bring engagement back up; it is what to do to keep engagement high and to retain those key employees who are likely to think about leaving as the economy and job market improve. Companies that keep their employees engaged will be more likely to retain their best talent.

Business Application

There are four strategies that companies can utilize to keep their best employees engaged and motivated:

  • Fair and comparable pay structures and other attractive benefit packages need to be in place;
  • Provide employees with the tools and resources they need to accomplish their job effectively;
  • Offer employees opportunities for development, continued learning and advancement; and
  • Ensure the work itself provides variety, challenge and autonomy which will further nurture engagement.

In addition to the strategies above though, it is important to stress that good leadership at all levels is the real key to engaging and retaining employees. Having a ‘good boss’ can be critical. There is plenty of evidence to show that people will leave a job because of a boss, more than because of the organization itself.

Improving the quality of managers at every level is the most efficient way to keep engagement high. This comes through teaching those managers how to be good coaches, give effective feedback and provide direction without micromanaging.

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Idea conceived

  • 2010

Idea posted

  • February 2013

DOI number



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