Keeping Employees Engaged:

What Does It Take?

By Lesley Brown, Regional Practice Leader, Employee Surveys and Insights
Lesley Brown
The Towers Watson 2012 Global Workforce Study
polled more than 9,000 employees in Asia Pacifc
on their attitudes and moods at a time of continuing
economic uncertainty and constant change in the
workplace. While employee engagement varies
widely across the region, the study found that in
general, employees are working more hours, feeling
more stress and are anxious about their fnancial
future. Many also expressed concern about trust in
their companys leadership, the support they receive
from managers and the ability to build careers in
their current organisations. A major issue is low
sustainable engagement.
Sustainable engagement, which refers to employees
maintaining a positive connection to their companies
that yields consistent productivity, is the sum of
three distinct elements. The frst is traditional
engagement, defned as employees commitment to
the organisation and willingness to give extra effort
to their employer. The second is enablement, defned
as having the tools, resources, and support to get
work done effciently. The third is energy, defned as
a work environment that actively supports physical,
emotional and interpersonal well-being. Effective
performance depends on all three elements of
sustainable engagement. When the three elements
are well balanced, employees are highly engaged in a
way that yields sustainable productivity over time.
The cost of disengaged employees
Companies have known for a long time that
work performance is tightly linked to employee
engagement. Towers Watson has found in earlier
research that the average operating margin of
companies with sustainably engaged employees is
three times as much as those with a low level of
employee engagement.
Apart from operating margin, sustainable
engagement affects productivity and staff retention.
Organisations with highly engaged employees report
loss of an average of 7.6 workdays per year, whereas
organisations with disengaged employees lost 14.1
workdays, or almost twice as many workdays per
year. Signifcantly, disengaged employees are more
likely to leave their organisations. Research shows
that 58% of disengaged employees compared with
17.1% of employees with high engagement, are high
retention risks.
A recent study by Towers Watson found that only two in ve workers
(39%) in Asia Pacic are highly engaged at work. The rest, three-fths
of the workforce, are struggling to cope with work situations that do not
provide adequate support and emotional connection. These workers are not
consistently productive and they lack the willingness to go the extra mile
for their employers. The lack of employee engagement translates to a cost for
their employers in terms of loss in productivity, lower work performance and
high staf turnover.
Sustainable engagement and the Asia
Pacifc workforce
Asia Pacifc is a diverse region and employee
engagement levels vary in different countries. In fast-
growing economies such as China, India, Indonesia
and the Philippines, employee engagement levels
are much higher than in the developed economies
including Australia, Hong Kong, Japan, Korea,
Singapore and Taiwan. [Refer Slide: Engagement
levels in APAC countries.]
Nonetheless, in both the fast-growing and developed
economies, talent attraction and retention remain
key challenges for organisations. Employers in
fast-growing economies fnd that attracting critical
skill employees is their biggest challenge. They also
fnd it hard to retain fresh graduates. On the other
hand, employers in the developed economies have
diffculty recruiting fresh graduates. [Refer Slide 9
in TM&R deck.] Given the intense competition for
workers, an effective talent attraction and retention
strategy requires keeping employees engaged.
In addition, the correlation between employee
engagement and corporate performance means the
opportunity exists for every organisation to improve
business performance by raising sustainable
engagement. To do this, employers need to examine
a number of elements in the work environment that
affect their employees.
Stress, Work-life Balance and Workload
From the study, Stress, Work-life Balance and
Workload is collectively identifed as the most
important driver for sustainable engagement.
However, workers are struggling to cope in this
aspect.
Workers in Asia Pacifc are stressed. More than
40% of the workers are bothered by work stress.
Paid time-off is under-utilised, especially in fast-
growing economies including China, India, Indonesia,
Malaysia, Philippines, where more than half of the
workforce reported using fewer paid time-off days
than in the past.
Moving forward, more than half of the employees
in the region also expect to work more hours than
normal in the next three years.
Excessive work pressure is a factor pushing people
out of their companies. Of those who are likely to
leave their companies within the next two years,
61% admitted they are often bothered by excessive
pressure on the job.
However, it appears that leaders perceived
interest in employee well-being can mitigate the
effect of excessive job pressures. The study found
that leadership is a key factor driving sustainable
engagement. Among many other leaders attributes,
what counts for employees is whether their leaders
show a sincere interest in their well-being. While
workers are generally critical about their senior
corporate leadership, in companies where there is
perceived interest in employee well-being, workers
are more favourable towards their leaders.
Communication and Empowerment
In a number of Asia Pacifc countries, effective
communication and empowerment is another factor
for sustaining employee engagement levels. This
is most prominent in China where employees who
feel their organisation keeps them informed of
the companys values, goals and performance are
more engaged. Likewise, employees who believe
management takes the time to listen to and act on
their suggestions are more engaged. In Hong Kong
and Taiwan, the survey data reveals that a shared
view of organisational goals and objectives drives
sustainable engagement. Unfortunately, there is
a gap in effective communication of goals and
objectives.
A signifcant observation is the central role of
managers in enablement, energy and traditional
engagement. The role of the direct manager has
shifted from being a technical expert that directs
the work of employees to more of a leader who can
motivate and coach their subordinates. Indeed, many
employees have high expectations of their managers
as people managers rather than task managers.
Managers who make sure their subordinates have
adequate tools, resources and support to make the
best possible use of their skills, and who assign
tasks suited to the skills of their subordinates
are viewed more favourably. They help enhance
shared accountability and sustainable engagement.
Managers who can communicate goals clearly can
help to alleviate pressure and set boundaries around
an employees workload. In this way, they have
signifcant infuence over employee engagement.
2 towerswatson.com Keeping Employees Engaged: What Does It Take?
Performance Management
Performance management is a key enabler of
employee engagement. Yet, employees in at least
three countries Singapore, Malaysia and India,
have issues with performance reviews.
The impact of pay-for-performance is felt the most in
Singapore. Among workers most likely to leave their
employers, only 28% see a clear link between their
job performance and pay, whereas among the group
of employees least likely to leave, 74% see the link
between performance and pay.
Singapore employees feel that their organisations
fall short in three areas: failing to help them
understand the career advancement opportunities in
the organization and the performance management
process, providing coaching to improve performance
as well as providing career planning tools and
resources, and being clear on opportunities for
career advancement and promotion for the most
qualifed employees. They expect employers
to communicate clearly how the performance
management process works.
A similar situation exists in India. While workers are
highly motivated by pay and monetary rewards only
58% of employees think that their organisations do
a good job of explaining their pay. There is a lack
of faith in pay for performance with over half of
employees (56%) not seeing a clear link between
their work performance and pay.
More can be done to make performance
management an effective strategy. Workers want
coaching to improve their own performance and more
communication on the performance management
process. They also want more clarity on performance
standards and assessments.
Career Advancement Opportunities
Career advancement directly drives employee
retention. In China, Hong Kong and Singapore, career
advancement fgures so strongly it even counters
attrition from comparable job offers.
However, about half of the employees in China, India
and Singapore feel they lack career advancement
opportunities within their organisation and have to
join another organisation to advance their careers.
This contributes to high employee turnover. In
Singapore, one in three employees is likely to leave
within the next two years and in India, 43% of India
employees indicate likewise.
Poor promotion prospects is further compounded
by poor perception of development opportunities.
Nevertheless, employers should still seek other
means to fulfl the needs of their employees for self-
growth, such as training to develop critical skills and
the provision of career planning tools.
Pay and Rewards
Perceived pay equity is low across most Asia Pacifc
markets. That is, workers do not think they are paid
fairly compared with people in other organisations
with similar positions, or compared with people in
their own organisation with similar positions. In the
11 Asia Pacifc countries covered in the study, the
perception of pay equity is signifcantly lower than
the global average.
As base pay is an important driver of talent
attraction and retention, the low perceived pay equity
is an issue affecting not only employee engagement
but also talent retention.
In many Asia Pacifc markets, employees are highly
focused on base pay and bonuses. In a tight labour
market especially, pay and monetary compensation
are often used to weigh competitive job offers.
One reason why employees are so focused on
pay and monetised rewards is that they may
not recognise they have a more comprehensive
employment deal. It is likely that their organisations
have not communicated clearly to them about their
total rewards.
Total rewards include fnancial rewards given for
performing a work role, such as base pay and
allowances, performance-based rewards such
as bonuses and incentives, plus career and
environmental rewards such as career development
experience and training.
The study found that in Malaysia and Australia in
particular, total rewards is under-estimated, while in
Document Title 3 towerswatson.com
most other Asia Pacifc countries, there exists the
opportunity to optimise total rewards and increase
employees understanding of the Employee Value
Proposition (EVP).
The EVP defnes the give and the get between the
employer and the employee. It is the tangible and
non-tangible rewards that an employee expects to
get in exchange for his commitment, discretionary
effort and performance for the organisation. An
EVP could include the purpose and values of an
organisation, the job, the culture and the people
aspects, and total rewards.
There is evidence that effective EVP implementation
mitigates poor pay equity perception, most notably
in Taiwan, Korea and India. It is also worth noting
that in Asia Pacifc, the fast-developing economies
are actively investing in the implementation and
communication of EVP. It is not coincidental that
these countries have higher employee engagement
levels.
Employers need to optimise their total rewards
programme that is based on a better understanding
of employee needs, including healthcare programmes
or retirement benefts.
While companies need to pay competitively and offer
the right pay, it is even more important for them to
communicate effectively to employees about total
rewards and the EVP.
Sustainable engagement needs to be
strengthened
While the Asia Pacifc region is dominated by fast-
growing economies, the drive for business growth,
and the changes and restructuring in workplaces
can actually cause leaders to lose touch with their
employees over time. Employers who are able to
provide reassurance and clarity to employees about
the changes taking place in the organisation, their
job security and pay will go some way in mitigating
their employees stress and anxiety, and encourage
their level of engagement.
Even for companies with engaged employees,
sustainable engagement is fragile and employers
would do well to strengthen the key enablers of
sustainable engagement in their organisation.
It is evident from the study that a few factors
are important for getting it right with employees.
These include effective leadership, effective
communication, performance management and
proper communication of total rewards and the
Employee Value Proposition.
About Towers Watson
Towers Watson is a leading global professional services
company that helps organisations improve performance
through effective people, risk and fnancial management.
With 14,000 associates around the world, we offer
solutions in the areas of employee benefts, talent
management, rewards, and risk and capital management.
Copyright 2013 Towers Watson. All rights reserved.
TW-AP-13-30515
towerswatson.com