2012 Trends in Global Engagement

From Credit Crunch . to Talent Crunch Aon Hewitt Webinar, June 28

Consulting
Global Compensation & Talent

Our speakers today

Laurent Termignon
Aon Hewitt EMEA Compensation & Talent Practice Director

Ken Oehler, PhD

Aon Hewitt Global Engagement Practice Leader

Dr. Wolf-Bertram von Bismarck

Aon Hewitt EMEA Talent Practice Leader

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Agenda
Introductions The global picture Focus on Europe How successful organisations are responding to the crunch

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Introductions Global Landscape: Uneven and Slowing Growth

Global growth projected at 3.5% in 2012 Over the next 13 years, global growth will be between 0.5 1.0% below the growth rate from 1995-2008 Growth rates vary significantly by region Advanced economy* growth is expected to slow from 1.6% in 2011 to 1.3% in 2012 Emerging economies** will slow from 6.3% growth in 2011 to 5.6% in 2012

Source: The Conference Board, Global Economic Look 2012 *Advanced Economies: U.S., Japan, EU prior to 2004 **Emerging Economies: China, India, Latin America, Middle East, Africa, Central + Eastern Europe, Russia, and other CIS
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European Workforce Projections

Population projections show increasing age & diversity workforce trends emerging over time. Projected share of the population with foreign background by age group (%)

Source: Lanzieri, G. (2011). Fewer, older and multicultural? Projections of the EU populations by foreign/national background, Eurostat Methodologies and Working Papers.
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In This Environment, Organisations Must:

Maintain efficiency Drive growth Foster more innovation Integrate acquired businesses better/faster Include and involve an increasingly diverse workforce Protect against talent flight as the economy improves Respond rapidly to local opportunities while operating globally

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The Global Picture

About our Global Trends Research

More than 3,100

organisations represented.

9.7 Million
total employees represented.

Asia Pacific, Europe, Latin America, North America

Broad range of company sizes and industries

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Our Definition of Engagement

Engagement is the state of emotional and intellectual involvement and commitment that leads people to do their best work.
We see engagement when people:

Say Stay Strive

Consistently speak positively about the organisation to coworkers, potential employees, and customers

Have an intense desire to be part of the organisation

Exert extra effort and engage in behaviours that contribute to business success

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Global Engagement Trends

Global engagement increased by two percentage points from 56% (2010) to 58% (2011) Four out of ten employees are still not engaged worldwide. Engagement levels are stabilizing globally but shifting across regions.

Global Engagement Trends

75%
71% 67% 72% 71%

Global Asia Pacific Europe

65%
60% 59% 64% 56% 55%

64% 58% 52%

55%

55%

Latin America North America

51%

45% 2009 2010 2011

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Employee Engagement and Economic Indicators

Employee engagement shows a lagged relationship with economic indicators (GDP and Unemployment). As GDP goes down, engagement goes up. As unemployment rates go up (which is highly correlated with changes in GDP), engagement rises.

Change from previous year

6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5%

Global Engagement (change in score) Global GDP (% change YOY) Global Unemployment (change in statistic) 2007 2008 2009 2010 2011

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Increased and Decreased Perception Levels from 2010 to 2011

80% 70% 60% 50% 40% 30% 20% 10% 0%
BU/Division Leadership Pay Benefits Value People/ Customers People Focus People/HR Brand Practices Alignment

BU/Division

Total Rewards

People 75% 70%

Company Practices

61% 54% 42%40%

52%49%

57%54%

53% 51% 47% 46%

2011 2010

80% 70% 60% 50% 40% 30% 20% 10% 0%

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46% 42%

49%52%

2011 2010

Effective Communication

Innovation
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Top Engagement Drivers

2011 Top 5 Regional Drivers
Global 2011 Career Opportunities Recognition Organization Reputation Communication Managing Performance Pay Innovation Brand Alignment People/HR Practices Career Aspirations
Shaded cells show the top three scores for each region/global.

APAC 1 3

Europe 1 5 2 4

Latin America 2 1

North America 1 4 3

1 2 3 4 5

5 2

4 3

2 5 4

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Focus on Europe

European Engagement and Economic Indicators

Also in Europe engagement lags economic indicators The workforce needs quite long to realize how a crisis is impacting their personal and work life Europe Engagement Trends Compared to Global Economic Indicators
10%

Change From Previous Year

8% 6% 4% 2% 0% -2% -4% -6% 2007 2008 2009 2010 2011

Global Engagement (change in score) Global GDP (% change YOY) Global Unemployment (change in statistic)

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Divergent Engagement Between Managers and Employees

While engagement for roles with people management responsibility continuously increase the engagement of professional as well as front line employees continuously dropped Engagement scores per Level in Europe

Executive & Senior Management Middle Management Professional Employee Team Leader/Supervisor Team Member/Front-Line employee

Source: Aon Hewitt Employee Engagement Database

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Zoom in European Markets

Within Europe engagement scores vary strongly between countries. Countries with high scores are Russia, Ukraine, Hungary, Romania and Greece
70% 64% 64%

60%

61% 55%

62% 53%

50%

53% 47% 49% 50% 48%

50% 47% 44%

50%

51% 48% 46%

47%

40%

38% 30%

2011

20%

10%

0%
Au st ria C B ze el ch giu Re m pu bl D en ic m ar k Fr an c G er e m an G y re e H ce un ga ry N et Ita l he y rla nd Po s la n R om d an ia R us s Sl ia ov ak ia Sp a Sw in e Sw de ite n rla nd Tu rk ey U ni Uk te ra d i Ki ne ng do m
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Critical Components of Engagement In Europe

'Say' scores in Europe are lower than 'Stay' and lower than 'Strive' scores Variations in the Stay questions are slightly stronger than in other scores
72% 70% 68% 68% 66% 64% 62% 60% 58% 56% 54% 52% 60% 59% 61% 67% 65% 64% 66% 70%

2011 2010 2009

Say
Consistently speak positively about the organisation
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Stay
Have an intense desire to be part of the organisation

Strive
Exert extra effort & engage in behaviors that contribute to business success
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2011 Key Driver Perceptions

Europe

Asia Pacific

North America

Latin America

Career Opportunities Organisational Reputation Innovation Communication Recognition

36% 47% 42% 40% 39%

47% 56% 56% 46% 45%

52% 60% 50% 38% 50%

57% 68% 59% 46% 46%

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Changes in Key European Driver Perceptions

Perceptions of organisational reputation have increased between 2010 and 2011 Perception of innovation is strongly decreasing
60%

50% 47% 40% 36% 37% 30% 45% 42%

51% 45% 40% 39% 42% 2011 2010

20%

10%

0% Career Opportunities Organisational Reputation Innovation Effective Communication Recognition

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2011 European Engagement Levels by Generation

Engaged
100%

Baby Boomers (born 19461964) 2011 Career Opportunities Communication Managing Performance Org Reputation Recognition Career Opportunities Innovation BU/Division Leadership Communication Managing Performance Career Opportunities Brand Alignment Recognition People/HR Practices Valuing People/People Focus

Generation X (born 19651978) Career Opportunities Managing Performance Org Reputation Recognition Work Processes Career Opportunities People/HR Practices Innovation Managing Performance Org Reputation Career Opportunities Brand Alignment Work Processes Pay Senior Leadership

Millennials (born 1979Present) Career Opportunities Communication Org Reputation Pay Work Processes Career Opportunities Pay Brand Alignment Recognition Innovation Brand Alignment Career Opportunities Pay Recognition Work Processes

80%

60%

2010
58% 52% 49%

40%

Baby Boomers

Generation X

2009
Millennials

20%

0%

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Responding to the crunch

Opportunities to Improve Engagement Including some advice from Aon Hewitt Best Employers!
Create a culture of engagement through leadership
Invest time to obtain top leadership buy-in We established a Leadership style program based on hand-picked managers whose teams have high engagement scores We have a role model program with strong people managers as buddies

Recognise peoples efforts and performance

Ensure recognition is fair, transparent and goes beyond the immediate team

Create employee growth opportunities

Develop more creative or less traditional growth opportunities

Connect with your employees

Listen to your employees, be transparent about why certain business decisions have been made and ensure timely communications

Select employees pre-disposed to engagement

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Closing Messages
Understand the key priorities across your organisation Focus on two or three things which will make a difference Execute well (and communicate!)

This is my third company and numerous cycles doing surveys and Ive only seen one really good success story. The entire organisation (11,000 people) dived into action planning. They mobilised a lot of people. It became the driving force, every conversation, everything. It had the attention and focus of leadership

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Aon Hewitts Research

Top Companies for Leaders
The most comprehensive research on leadership: with 478 companies participating and 900 CEO, HR and senior executives interviewed around the world, it provides the widest comparison of leadership policies and practices and valuable intelligence for all organisations seeking to improve their leadership capabilities.

This study the role managers play in optimising the business impact of employee surveys. Conducted in 10 European countries.

Qudurat Aon Hewitts labor market survey in the Middle East

Implying capabilities in Arabic, Qudurat provides compelling insights into the demographics strengths and preferences of talent in the region.

QUDURAT

Managers: Your Strongest (or Weakest) link in Driving Employee Engagement?

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Questions?
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Contact us at.

infoeurope@aonhewitt.com

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