Heightening the Challenge and Meaning of Work
Boredom and discontent in the workplace is a serious business performance issue. In a major international study of organizational effectiveness involving more than 28,000 respondents, Right Management has found that two-thirds of employees globally are less than fully engaged by their work and organization. With weak engagement translating into lower retention, greater absenteeism and poorer productivity, organizations almost everywhere are simply failing to perform to their true potential.
What can organizations do? Offering employees career development opportunities provides an important answer. As our study shows, career development not only builds skills and capacities that can help organizations achieve their strategic goals, but also addresses the motivators driving employees to put their skills and capacities to optimal use. Employees are looking for challenge in their jobs. They want to contribute meaningfully to their organization’s success. By equipping employees to find greater challenge and meaning in their work, career development promotes engagement and enhances the performance of the individual and the organization alike.
How This Research Was Conducted
Conducted between November 2008 and January 2009, our study surveyed 28,810 employees across 10 business sectors in 15 countries to get their views on 11 major topics related to organizational effectiveness.
Respondents indicated their level of agreement with nearly 100 different statements grouped according to each of these 11 general topics. We then tested for statistically significant (i.e. greater-than-chance) relationships between responses to the statement “There are career opportunities for me at my organization”—an item belonging to the learning and development topic—and responses to statements addressing engagement and other key determinants of organizational effectiveness. While the existence of a strong relationship, or correlation, is not necessarily an indication of a causal link, it does provide reasonable grounds for concluding that causality may be involved. Over 90% of our respondents worked for private corporations employing 50 or more people and earning revenues between $1 million and $1 billion. The study used a stratified sample of employees that matched workforce population in each country on several factors, including industry, size of organization, gender and age.
United States, Canada, Australia, New Zealand, Brazil, UK , France, Germany, Norway, Sweden, Denmark, China, India, Japan, South Korea
10 BUSINESS SECTORS
Agriculture, Forestry and Fishing; Mining and Quarrying; Manufacturing; Electricity, Gas and Water Supply; Construction; Wholesale and Retail Trade; Restaurants and Hotels; Transportation, Storage and Communication; Finance, Insurance, Real Estate and Business Services; Government, Social and Personal Services
Opportunity for learning and development is a top driver of engagement. Of the 11 general topics, learning and development opportunities was the second highest ranking item to drive engagement, more important than leadership, culture and compensation.
ENGAGEMENT DRIVERS BY TOPIC IN RANK ORDER
1. Work processes 6. Structure, roles and capability
2. Learning and development opportunities 7. Recognition and reward
3. Culture 8. Customer focus
4. Senior leaders 9. Strategy
5. Communication 10. Immediate managers
Our research revealed significant correlations between the statement “There are career opportunities for me at my organization” and several statements and topics addressing organizational effectiveness. The key findings include:
•Providing career opportunities drives engagement. Organizations that provide career development opportunities are six times more likely to engage their employees than organizations that do not. Fifty-four percent of employees who responded favorably to (i.e. either agreed with or strongly agreed with) the statement “There are career opportunities for me at my organization” reported being engaged. That figure compares to an engagement rate of only 9% among employees who responded unfavorably to this statement.
•Providing career opportunities drives productivity. Organizations that provide career development opportunities are almost 2.5 times more likely to be productive than organizations that do not. Seventy-two percent of employees who responded favorably to the statement “There are career opportunities for me at my organization” reported that their organization is productive. Among those who failed to respond favorably, by contrast, only 30% indicated that their organization is productive.
•Providing career opportunities drives performance. Organizations that are judged to be a best performer are almost three times more likely to provide career development opportunities than those that are judged to be a below-average performer. Sixty-three percent of respondents who identified their organization as “one of the best performing organizations in its sector(s)” also responded favorably to the statement “There are career opportunities for me at my organization.” By contrast, a favorable view of their organization’s commitment to providing career opportunities was taken by only 23% of those who identified their organization as a below-average performer.
Our findings show a connection between providing career opportunities and all the links of what we might call the performance chain. Career opportunities drive engagement, which, in turn, drives retention and productivity. Best-performing organizations are significantly more likely to provide career development opportunities than are below-average, average and even above-average performers because best performers recognize that providing such opportunities works. It yields measurable results.
•BRIC countries provide the most opportunities. At 68%, 59% and 53%, respectively, employees in India, China and Brazil were most likely to agree or strongly agree that their organizations provided career opportunities. France, Sweden and Japan recorded the lowest favorable response rates at 38%, 36% and 33%, respectively. The United States’ favorable response figure was 52%, the United Kingdom’s figure was 44% and Germany’s figure was 40%. It shouldn’t perhaps surprise us that the countries that appear to be providing the most career opportunities are three of the four so-called BRIC nations whose economies are widely recognized for their fast-paced development.
•Career opportunities double engagement in Japan. At 63%, Canada, the United States and Denmark showed the highest engagement levels among employees who agreed or strongly agreed that their organizations provide career opportunities. By contrast, in China, South Korea and Japan, those who agreed or strongly agreed that their organizations provide career opportunities reported engagement rates of only 44%, 32% and 23%, respectively—the lowest rates of all 15 countries surveyed. Yet it is in these countries dwelling at the bottom of the opportunities-engagement table that providing career opportunities has the biggest impact on engagement. In Japan, where only 11% of respondents reported being engaged, extending career opportunities to all employees would more than double engagement rates to 23%. The increases would be comparable in South Korea, where engagement would rise from 18% to 32%, and in China, where it would rise from 29% to 44%. Extending career opportunities would have a significant impact even in countries at the top of the table. In Canada, the United States and Denmark, engagement would increase by more than one-quarter.
•Career opportunities double retention in South Korea, Brazil and China. German, Canadian and U.S. respondents who agreed or strongly agreed that their organizations provide career opportunities were most likely to indicate that they would stay with their employer for at least five years. The figure for Germany was 73%, for Canada, 71% and for the United States, 70%. The greatest impact on five-year retention, however, was recorded in South Korea, Brazil and China. While only 21% of South Korean respondents who said that their employers fail to provide career opportunities indicated they would stay at least five years, 56% of those who said that their employers do provide opportunities indicated they planned to stay at least five years. The comparable figures for Brazil were 27% and 60% and for China were 25% and 50%. Intentions to stay, in short, more than doubled when career opportunities were provided.
Re-engaging the Disengaged
The true significance of our findings can be appreciated only when considered in relation to accumulating evidence that a large and growing number of employees are not satisfied with their jobs and places of work.
Our organizational effectiveness study itself provides a good deal of this evidence. It found that only 34% of employees worldwide are fully engaged by their jobs and organizations. In none of the countries surveyed did engagement levels top even 50%. The highest levels were recorded in India (45%) and the United States (44%). European countries ranged from a high of 40% (Denmark and Norway) to a low of 30% (Germany and France). East Asian countries scored lowest of all, with China at 29%, South Korea at 18% and Japan at a mere 11%.
Our study approached engagement as a state of mind encompassing an employee’s satisfaction with, pride in and commitment to both the job and the organization. It also took into account an employee’s willingness to speak well of (or advocate for) his or her job and organization. Clearly, the low levels of engagement revealed by our study indicate that many employees worldwide are not only less than satisfied with their work and workplace, but also less than committed, less than proud and less than willing to advocate.
These indications of dissatisfaction are supported by other research. In a recent poll of more than 900 workers across North America, Right Management found that a remarkable 60% of respondents plan “to pursue new job opportunities as the economy improves in 2010.” A further 21% indicated that they are considering making such a move and are actively networking as a result. Only 13% said they intended to stay. Our results are largely consistent with the findings
More evidence of discontent emerges in a recent Conference Board study involving 5,000 representative U.S. households. Researchers found that only 45% of U.S. employees find their jobs satisfying and only a slim majority (51%) find their jobs interesting. This study is worth pausing over since it not only presents a snapshot of employee attitudes at the moment, but also identifies a long-term trend. Job satisfaction, it reveals, has declined by 16% since 1987, with about a quarter of that decline (nearly 4%) occurring in 2008 alone. The recession has clearly had a significant impact on workforce unhappiness, but the trend is not merely cyclical and the challenge not merely short-term. The Conference Board’s figure for U.S. job satisfaction (45%), we should note, is almost identical to Right Management’s figure for U.S. employee engagement (44%).
It is, then, in the context of extensive disengagement, dissatisfaction and discontent within workforces worldwide that we need to understand the findings of our organizational effectiveness study. Career development represents one of the most effective means organizations have at their disposal of addressing this pressing talent management issue. Employees are not inspired by their jobs. Career development offers them opportunities to assume roles of greater interest, challenge and/or variety, while providing greater meaning in work by linking individual effort to the larger purposes of the organization. Employees want to understand how they fit into the larger picture and they want to participate meaningfully in helping the organization realize its strategy. Providing career development makes such understanding and participation possible.
CAREER DEVELOPMENT LINKED TO INDIVIDUAL ENGAGEMENT DRIVERS
A consideration of the top individual engagement drivers revealed by our study offers penetrating insight into just how providing career opportunities can enhance engagement. As stated earlier, our survey consisted of 100 statements grouped into general topics. We analyzed the correlations not only of each general topic with engagement, but also of each individual statement. Of all the statements comprising our survey, “There are career opportunities for me at my organization” showed the 15th highest correlation. That ranking alone demonstrates the connection between providing career opportunities and engagement. It is important to appreciate, however, that providing career opportunities is also connected with individual engagement drivers even higher on the list.
CAREER DEVELOPMENT AND TALENT ATTRACTION
An additional benefit of providing career development involves talent attraction. If organizations do, indeed, begin to see talented employees leaving in large numbers within the next year, implementing effective career development initiatives could play a strong role not only in reversing the trend, but also in filling vacant positions. Right Management recently conducted a survey asking, “What is most important when considering a new employer?” Respondents singled out career development prospects by a wide margin. Organizations offering career development opportunities attract new talent by building their brand as an employer of choice.
UNDERLYING WORLD OF WORK TRENDS
Talent mismatch driving need for organizations to develop talent. The case for providing career development must also be understood in conjunction with trends in the world of work tied to changing demographics. In many countries, the working-age population is either growing more slowly than in the past or experiencing outright decline. One result is an increasing talent mismatch: as highly skilled employees retire and as the nature of available work shifts, organizations are already encountering difficulties filling key high-skill positions even as, paradoxically, they reduce their workforces generally. Since this talent mismatch is only likely to intensify as the population ages, the importance of developing talent that can help the organizations meet evolving needs will become ever more urgent. Career development enables employees to proactively own their career progression in view of the new skills they will need in the changing world of work.
Employees demanding more choice and greater opportunity. Another outcome of demographic trends is a more varied, multi-generational workforce composed of individuals with unique needs and desires. Especially in high-skill work environments, individuals will expect, and be granted, more choices and greater control over their working lives. Even though organizations have shed jobs and placed increasing emphasis on employee productivity, they will increasingly find it necessary to adopt a new model that gives employees a more active role to play, with higher levels of contribution and participation. Highly talented employees will look for workplaces where they can express their individuality and realize their aspirations. A workplace that doesn’t promote, enable and support personal interests and creativity, and isn’t interested in listening to new ideas, is unlikely to hold many attractions.
Recommendations and Advice
Align Talent with Business Strategy
What are the building blocks of an effective career development strategy? How do organizations ensure that they demonstrate their commitment to employees, that they have the right people with the right skills to meet current and future business needs, and that employees understand how they can contribute to the organization’s success? What, in short, do organizations need to do to provide employees with career opportunities?
KEYS DRIVERS OF LEARNING AND DEVELOPMENT
Our organizational effectiveness study provides some high-level guidance by identifying key drivers of “There are career opportunities for me at my organization.” In order of impact, the top seven are:
1. I am encouraged to take ownership of my own development
2. I receive the development I need to do my job well
3. I know how to progress in my organization
4. My organization invests in its people’s learning and development
5. There is sufficient incentive to perform well at my organization
6. My organization ensures that there are people ready to move into jobs when positions become available
7. My immediate manager facilitates effective discussions about my career development
Investing in learning and development (4) and ensuring that individuals receive the development they need to succeed in their jobs (2) are obvious steps in creating meaningful career opportunities. So too is providing performance incentives (5): employees must be given reasons for advancing their careers. Clearly, organizations that ensure that they have people ready to move into newly available positions (6) signal their commitment to providing career opportunities rather than hiring from the outside. The most powerful driver of “There are career opportunities for me at my organization” is empowering employees to take ownership of their development (1). In part, such empowerment must involve ensuring that employees know how to progress (3), which, in turn, may depend on managers facilitating effective career discussions (7).
These drivers, then, can be reduced to four essential recommendations:
1. Prefer developing from within versus hiring from the outside
2. Ensure that your investment in learning and development is meaningful
3. Provide employees with incentives to progress
4. Make employees partners in their own development—empower them
BE SYSTEMATIC IN YOUR APPROACH
How, then, do you invest? How do you make employees partners in their own development? How do you ensure that qualified people are available internally to fill vacancies? An essential step is to create a formal career development program. Depending on the needs of the organization, such a program could take a variety forms, but certain features are universally applicable. A distinction must first be drawn between the accountabilities of the organization and those of employees.
Organizations Should Conduct a Skills and Needs Inventory. The organization must undertake a rigorous analysis of present workforce skills and future talent needs. Creating an inventory of present skills and future needs is key to giving proper direction to individual development. Development cannot succeed for the individual, let alone for the organization, unless it is strategically oriented towards achieving larger business goals. Employees who develop capabilities of little relevance to their job or organization won’t have an active part to play in the organization’s success.
Organizations Should Emphasize Meaningful Career Discussions. The organization must also take the lead in initiating and facilitating meaningful career discussions. Facilitating career discussions is an essential step in empowering employees to drive their own development. This point is worth emphasizing because our research shows that career discussions between employees and immediate managers are rare. In a recent poll involving more than 650 U.S. employees, 37% of respondents indicated that they never engage in career discussions with their managers, while 29% said they engage in such discussions just once a year. Only 16% reported that they have career discussions once a quarter. Skilling and equipping managers to have regular, meaningful, career coaching conversations with employees is a foundational step in a systematic career development program. Just as important is holding managers accountable for holding those career conversations as part of any systematic career development program.
Career discussions are not only vital to providing career development opportunities for employees, it offers managers an occasion to address directly many of the top individual drivers of engagement that were revealed in our organizational effectiveness study (referenced above). Career discussions, for example, can be used to explore and/or reinforce the organization’s core values; demonstrate that employees’ opinions count; that senior leaders value employees; and help employees understand what is expected of them at work and how they can contribute to meeting the needs of the customer. Ten of the top 15 individual drivers of engagement can, in fact, be tied to career discussions.
Employees Should Be Accountable for a Process of Career Discovery. A successful learning and development program cannot rely on the organization alone. With guidance, support and tools from their organization, employees must be held accountable for engaging in a process of career discovery. This process should involve three phases:
•Self-discovery. Individuals employ reliable assessment tools to help them better understand their abilities, interests and values. They must receive assistance in evaluating assessment results.
•Organizational discovery. Individuals look beyond their current role and business unit to explore the needs, success factors, strategy, direction and values of the organization as a whole. By doing so, they gain a more thorough insight into how their abilities, interests and values can be aligned with the organization’s priorities. It is here that the organization’s inventory of talent needs would come into play.
•Career discovery. Individuals evaluate options, develop a career map and hone skills, enabling them to manage their careers proactively. They receive guidance in the form of structured career discussions with managers and team members.
This process must be continuous and dynamic. An individual’s interests change, as do the priorities of an organization. Career maps should not be set in stone, but regarded as guides that will evolve as the individual evolves in his/her role.
Rolling out a formal career development program across an entire organization can be a complicated and daunting proposition. A proven approach to lessening the burden would be to build momentum gradually by starting with small pilot projects, moving on to individual business units and eventually the organization as a whole.
Career Management Improves Retention
A leading global consumer products organization began experiencing retention issues after a downsizing initiative significantly reduced upward career growth opportunities for remaining employees. In response, the organization, partnering with Right Management, introduced a career management program equipping employees to be more proactive and successful in managing their own careers. Participants engaged in self-discovery and career planning activities involving assessments, workshops and one-on-one coaching. In analyzing results, the company found that attrition among those who participated in the program fell to less than half of the company’s average and its return on investment exceeded 200%.
MAKE IT CULTURAL
A formal career development program alone is not enough to provide employees with career opportunities. If formal development is not to devolve into a set of sterile procedures, it must be embedded in an organization-wide culture of learning and development. Senior leaders, immediate leaders and employees all have a role to play in fostering such a culture.
An essential condition is the support of senior leadership. Senior leaders must throw their weight behind career development, present it as a key strategic imperative and emphasize the role of employees in taking ownership of their own careers. Doing so provides leaders with a clear opportunity to demonstrate that they value employees, treat them with respect and appreciate their opinions. As our organizational effectiveness study has shown, these are all key engagement drivers.
The role of immediate leaders is to help make the organization’s career development intentions real and impactful. They must approach career development as a key responsibility and hold themselves accountable for enhancing their career coaching skills, as a means of supporting employees to realize their career goals. Facilitating varying work responsibilities, offering stretch assignments, implementing a job-rotation scheme or providing opportunities to run with new projects or initiatives, can support employees in their learning and growth on the job. By initiating effective career development discussions, leaders can help employees better understand the organization’s core values and mission, what is expected of them in the organization’s changing landscape, how they can contribute to realizing the organization’s strategy, and how they can access opportunities beyond their immediate role. These, again, have all been identified as important engagement drivers.
Employees, finally, must develop the capacity and be given the license to manage their work and careers proactively. They must take the initiative not only in understanding the organization and its priorities, but also in pursuing the experiences and skills that will help them grow in their role, and in taking ownership of their work.
The Development Imperative
Workforces worldwide are showing increasing signs of being dissatisfied and disengaged, even as a large and growing body of research has drawn a direct line from engagement through retention, productivity and, ultimately, business performance. Organizations that fail to address workplace discontent risk losing their competitive advantage; their ability to respond quickly and effectively to changing market conditions; their investment in key talent with hard-to-replace skills; and whatever productivity gains they have achieved. Our evidence indicates that career development can make a significant contribution to diffusing the threat. Career development provides work with interest, challenge and meaning. Aligning the skills and capabilities of the employee with the business strategy of the organization satisfies the need of employees to make a difference and invest in the organization’s success. It drives engagement, retention, productivity and performance.
This study is courtesy Right Management Inc., the talent and career management expert within Manpower, the global leader in employment services.