About 50% of global employees are open to quitting their jobs, putting many companies in danger of value loss, according to research conducted by Willis Towers Watson.
The results show the extent to which employers continue to grapple with disrupters such as inflation and the “Great Resignation” — or the difficulty of attracting and retaining talent in the wake of the COVID-19 pandemic, according to WTW, a business advisory firm.
“The implications of this research are profound,” Jill Havely, managing director of employee experience at WTW, said in a Thursday press release. “Under the shadow of ongoing global disruption, thriving rather than merely surviving will require organizations to develop a more compelling and purposeful employee experience that reconnects, re-energizes and retains employees while supporting their healthy productivity.”
Inflation and a higher cost of living are driving down real wages as workloads are being compounded by the Great Resignation and decreased staffing — creating a sense of hardship and a decline in perceived leadership support among employees, according to WTW.
Core inflation excluding food and energy, a gauge of underlying price pressure, rose 5.6% last month on an annualized basis compared with 5.5% in February, fueling expectations that the Fed will raise the main interest rate by a quarter percentage point in early May, CFO Dive previously reported.
The economic situation is complicating employee retention efforts, which in turn is putting some organizations at risk of losing value, according to WTW. Organizations that provide a more positive employee experience tend to outperform others, producing growing revenues, it found.
The research uncovered four distinct categories of organizations based on how employee engagement is impacting their business value:
- Only 37% of businesses globally are in a “value drive state,” where employees are more engaged, more likely to believe their voice matters, feel capable to deliver their work and therefore are more likely to remain with their current employer.
- On the other hand, 18% of businesses are in a “value risk” state, where employees feel unheard, see less career advancement opportunities and believe their organization is less likely to match rewards to performance. In these organizations, significant business value is at risk due to the number of high-performing employees thinking of leaving.
- Fifteen percent of businesses are in a “value potential state,” where employees are disengaged and contribute less value but don’t leave the company.
- Thirty percent are experiencing a “value drag state,” where employees are largely disengaged and looking to leave, thus creating a drag on business value. In these organizations, workers believe there is less clarity over career paths and have lower confidence in pay for performance.
“Only organizations in a value drive state will grow, while organizations in a value drag state will decline and deliver low to no returns,” Havely said.
The research, conducted in January, included feedback from four million employees working at 355 large and midsize private companies, representing a broad range of industries, according to WTW, which also tracked the financial performance of the organizations.