NEW YORK, N.Y., March 16, 2010 — The “Great Recession” may have ended, but its impact on the U.S. workforce and employment itself looks to be deep and longlasting, according to the results of new research from global professional services company Towers Watson (NYSE, NASDAQ: TW). The Global Workforce Study (GWS) — a biennial survey of employee attitudes and workplace trends — confirms that the recession has fundamentally altered the way U.S. employees view their work and leaders today, while dramatically accelerating changes to the basic social contract that underpins employment here. In stark contrast to earlier Global Workforce Studies, the 2010 results indicate that U.S. employees have dramatically lowered their career and retirement expectations for the foreseeable future. On-the-job advancement now takes a back seat to a growing desire for workplace security and stability — at the very point in time when traditional employment safety nets are eroding.
“For many employers, the recession has put the final nail in the coffin of the traditional ‘deal’ that once existed between employees and employers,” said Max Caldwell, a leader of the company’s Talent & Rewards business. “Not only have people seen many coworkers, friends and family members laid off, but they know they are increasingly on their own for everything from health care, to managing their career, to planning for a secure retirement. This represents a profound shift for employees and employers alike.”
The results also confirm just how far we’ve moved from the “free agent nation” concept hyped as a new approach to work just a decade ago. A startling eight out of 10 respondents want to settle into a job, with roughly half saying they want to work for a single company their entire career and the rest wanting to work for no more than two to three companies. This move toward workplace “nesting” is no doubt influenced by a perceived dearth of job opportunities, coupled with U.S. employees’ lower appetite for the risks inherent in changing jobs. In fact, more than half (56%) of the U.S. workforce expects little change in the job market over the next year, and over a quarter (28%) anticipate continued deterioration in the employment picture.
Given these views, it may not be surprising that employees today also appear willing to sacrifice career advancement to maintain what job stability they’ve been able to hang on to through the recession. Specifically, the GWS found that:
- 51% of those polled said there are no career advancement opportunities in their current roles, and another 43% believe they must leave their organization and join another in order to advance to a higher-level job.
- Yet, despite these obstacles to advancement, and the erosion of many of the benefits fundamental to the traditional and highly paternalistic deal, fully 81% of respondents said they are not actively looking for other positions.
In perhaps the starkest sign of employees’ intense focus on job security, when respondents were asked about the factors most important in a preferred work situation, more chose a “secure and stable position” (86%) than “substantially higher levels of compensation” (74%).
“The recession has clearly prompted many employees to rethink their priorities and focus on a longer-term commitment to their employer in return for some semblance of job security — despite the cuts or elimination of many programs, from bonuses to training, traditionally used as retention tools,” said Laura Sejen, a leader of the company’s Talent & Rewards business. “Where once employers fretted over a ‘war for talent,’ they must now plan for a workforce that appears ready to settle in for years — perhaps even decades."
Retirement Confidence Continues Its Slide
Respondents’ attitudes about their ability to plan for and successfully retire add another deep wrinkle to evolving employment expectations. While the average worker around the world anticipates retirement at age 62, that number rises to 67 in the U.S. In fact, almost one-third (30%) of those polled in the U.S. plan to work to age 70 or beyond. Compounding the issue, employees acknowledge that they are responsible for planning for and managing their retirement needs, but roughly half don’t feel prepared to actually do so.
“Delayed retirement has been a steadily increasing trend in the U.S., but the recession has been a dramatic accelerant,” said Sejen. “Employees get that they’re primarily responsible for their financial security in retirement, but they don’t feel they have the understanding, education or tools to make the right decisions. And the stock market’s impact on 401(k) balances certainly put a fine point on the validity of their concerns. Companies now have an uphill battle not only to enable better employee self-management of benefits, but also to cope with a potential log jam of aging workers — all while addressing the contrasting needs of younger employees trying to rise through the organization.”
The Changing Face of Leaders
In another notable finding from the study, it appears that, in the current climate of uncertainty and constant change, employees increasingly value leaders who connect with the workforce on an emotional level. When asked what attributes they most wanted in senior leaders, respondents noted a desire for a senior leader who:
- Is trustworthy: 79%
- Cares about the well being of others: 67%
- Encourages the development of talent in the organization: 56%
- Is highly visible to employees: 42%
- Manages financial performance successfully: 42%
“Given the state of affairs in many businesses over the last year, perhaps it shouldn’t come as a surprise that trustworthiness tops the list of desired senior leadership qualities,” said Caldwell. “This craving for the more ‘emotionally intelligent’ aspects of leadership indicates that many employees feel disconnected from their organization and are looking for their leaders to project integrity and empathy, and continue to focus on the development of employees.”
How to Manage Through the Fundamental Shift
The recession has left an indelible imprint on the minds of U.S. workers, and business leaders will be well served to account for these shifting priorities as they guide a productive and engaged workforce through the economic recovery and beyond.
“It’s clear that what worked for an organization pre-recession just isn’t sustainable in today’s environment,” said Sejen. “Fundamental changes in both the employee-employer contract and employees’ own priorities make a return to normal nearly impossible. Instead, organizations must hone their ability to enable employee self-reliance, fostering within each person the knowledge, skills and confidence necessary to effectively manage their careers, their health and their financial future outside the safety net provided in the past.
“As our research details, the vast majority of employees understand they are in control of this ‘new deal,’” said Caldwell, “but it’s up to employers to equip them to act by giving them the tools and training they need to be confident and successful.”
About the Study
These findings are part of the Towers Watson Global Workforce Study 2010, a survey of more than 20,000 employees in 22 markets around the world to gauge employee views on the changing nature of the employment deal. With its worldwide scope and reach, the Global Workforce Study is the most comprehensive analysis of the post-recession employee mindset available today. In the United States, employees were surveyed online by Harris Interactive on behalf of Towers Watson between November and December 2009. The margin of error for the U.S. results is 2.98%. The research builds upon several previous Global Workforce Studies to provide companies with actionable insights around employee behaviors, opinions and engagement levels.
Supporting exhibits from the U.S. research
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at www.towerswatson.com.