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Employee Loyalty Drops Worldwide

By Melissa J. Anderson

According to the latest research from Mercer on global employee engagement levels, employees are fed up. The study showed that employee loyalty has hit all time lows around the world, and it doesn’t look good for employers seeking to tap into innovation and effectiveness that could pull them through the global economic downturn.

Mindy Fox, Senior Partner and US Region Leader at Mercer, said, “Widespread apathy and high turnover can be detrimental to an organization’s business performance, especially in the difficult economic environment we’re experiencing as companies are looking to drive productivity and efficiencies.”

The study, based on the survey responses of nearly 30,000 employees in 17 geographic markets, revealed that the percentage of workers who are “seriously considering” leaving their companies has increased in every geographic market studied.

For example, despite the continuing tough jobs market in the US, the percentage of individuals who want to quit their jobs has increased from 23% in 2005 to 32% in 2010. In the UK, the situation is even worse. Thirty-six percent of employees said they are seriously looking to leave their companies.

Decrease in Loyalty Not Related to Pay

Pete Foley, PhD, Principal and North American Employee Research Leader at Mercer explained that employees are getting restless in their current companies, despite the continuing economic uncertainty. He said, “The overall employment deal is in a state of flux around the world, with employees rethinking what they want out of the employment relationship. Our research shows that, despite the ongoing economic uncertainty, more employees would consider leaving today for a better opportunity.”

Mercer stressed that many of the reasons for the decrease in loyalty are non-financial, with employees concerned about issues like “respect, work/life balance, type of work, quality of co-workers and quality of leadership,” and especially in the Americans, “working in an environment where employees can provide good service to others” is considered part of a valuable employee experience.

Colleen O’Neill, PhD, Senior Partner at Mercer and Talent Leader in the US and Canada at Mercer, said, “Employee engagement reflects the total work experience, and a big part of it is how you are treated, what kind of work you do and how you feel about your co-workers, bosses and the general work environment.”

She added, “Without a doubt, financial factors like pay and benefits are a vital part of the employment deal, especially in the US, but employers need to consider and manage the full range of factors to ensure that their workforce is engaged.”

Dr. O’Neill emphasized that even though times may be tough employees can not simply expect employees to stick around when they feel they are being treated unfairly. Fortunately, non-pay-related factors don’t cost anything, and if leaders can find a way to leverage these factors within their own organizations, they can influence their employees to stay motivated. She said, “When financial resources are limited, organizations can leverage these nonfinancial factors to effectively boost employee commitment and productivity.”

Generational Loyalty

The other issue related to a decrease in loyalty is changing generational attitudes about work. It was once common for someone to work at the same company for decades and then retire. According to Mercer, that’s no longer true, particularly when it comes to the Millennial generation.

Mercer’s research also showed that while younger workers were more satisfied with their current companies than average, they were also more likely to be considering leaving their jobs. According to the research, 46% of employees between the ages of 16 and 24 said they were seriously considering a new job. And 40% of employees between the ages of 25 and 35 said they were seriously considering a new job. On average, about 35% of global employees said they were seriously considering leaving their companies.

Yet at the same time, workers in this age range were the most likely to say they were highly satisfied with their jobs.

“These findings present a real dilemma for employers,” said Chris Johnson, Chris Johnson, Partner in Mercer’s Human Capital business. “Do they simply accept that young talent is going to leave, no matter what the organisation has to offer, or do they invest time and resources in an attempt to change the views and employment habits of their younger workers? Strategies, of course, will vary by organisation, but it is essential to first have a clear understanding of an employer’s value proposition and then analyse what steps can or should be taken to increase the tenure of young workers.”

Should companies work harder to retain this group? Or should they simply anticipate a lot of turnover in the coming years?

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