Consulting

Performance, Reward & Talent

2013 Trends in Global

Employee Engagement
Report Highlights

Executive Summary
The global recession has certainly taken its toll on employees. Pay freezes, benefit cuts and layoffs are still at the
forefront of many employees thinking. Additionally, the continued high rates of unemployment, lack of hiring, and
extended hiring cycles for open positions (an average of 23 business days today compared to a low of 15 in mid20091) create further stress and uncertainty for employees, making it more difficult to achieve or maintain healthy
levels of engagement.
As markets around the world continue to display uneven growth patterns following the global recession, predictions
for 2013 are marginally optimistic but varied by region. The International Monetary Fund (IMF) predicts stronger
global growth in 2013, driven by growth (albeit slow growth) in China, India and Brazil, and greater confidence in
U.S. growth following the recent election.2 The Euro Zone predicts continued variability, with minimal expansion in
Germany and France, while countries such as Italy and Spain continue to resolve their country-specific challenges
from the global economic crisis.3
Against this backdrop, engaging the right employees in the right behaviors remains the critical ingredient of how
companies manage the diverse economic conditions facing their organizations today. In our last report, we asked
employers to consider an atypical question in solving the engagement equationnot what should we do to engage
employees? but what do employees need in order to be engaged? In this incredible time of competing
pressuresdemand for profitable growth, financial market volatility, political uncertainty, global shifts in workforce
demographics, sea changes in the countries driving economic expansion and a rapidly shifting regulatory
environmenta finer point must be put on that core engagement question. Leaders must ask themselves not only
what do employees need in order to be engaged? but also what behaviors are we asking them to engage in?
The ability of companies to find, understand, and manage talent hinges upon getting a powerful, differentiated and
engaging employment contract right. The demands outlined above are putting pressure on this contract. Companies
require steadfast motivation and productivity in this constrained environment. At the same time, dynamic employee
trends are changing the nature of what employees demand in exchange for their discretionary effort. Striving to
maintain a higher level of employee engagement not only contributes toward short-term survival during economic
volatility, but also is a key factor for longer-term business performance and better positioning when market conditions
become favorable. The companies that get engagement right can enjoy a surplus of competitive advantage in talent
strategy and business results that is hard for others to replicate. If one believes that talent is one of the last sources of
competitive advantageand that motivated and productive employees are the make-or-break ingredient to successfully
navigating the business pressures outlined aboveemployee engagement should be a top business imperative for all
business leaders.

With Positions to Fill, Employers Wait for Perfection, The New York Times, March 6, 2013; references data from
The Establishment-Level Behavior of Vacancies and Hiring; Steven J Davis, R Jason Faberman and John C Haltiwanger, The
Quarterly Journal of Economics; January 31, 2013
2
Modest Growth Pickup in 2013, Projects IMF, Global Economic Outlook, January 2013;
http://www.imf.org/external/pubs/ft/ survey/so/2013/new012313a.htm
3 Ibid.

2013 Trends in Global Employee Engagement

Key Findings

Engagement levels are on the rise globally but shifting across regions. Although the economic impact of the
recession continues to rebound in some areas and recess further in others, engagement levels rose slightly to 60% in
2012, up 2 percentage points from 58% in 2011. We see the largest engagement increase in Europe (improving 5
percentage points) and Latin America (improving 3 percentage points). North Americas engagement decreased
slightly by 1 percentage pointparticularly in the U.S., where engagement dropped 3 percentage pointsand Asia
Pacific remained the same.
Worldwide, 4 out of 10 employees are still not engaged. While 60% of employees globally are considered
engaged, 40% of employees are passive or actively disengageda continuing theme from 2011. While engagement
levels are relatively stable and many employees are advocates for their employers, 2013 will likely be a challenging year
as other engagement indicators regarding employees desire to stay with an organization and go above and beyond
are less positive.
Employee engagement is a leading indicator of company growthbut lags economic forces. The economic
recession of 2009 put significant downward pressure on corporate spending on talentand engagement took a
significant hit in the following year. The global economy has shown signs of growth in the years since, however, and
engagement has been on the rise as well. Analysis of employee engagement and company performance data
concludes companies that managed higher employee engagement relative to their peers throughout the economic
downturn are now seeing dramatic, positive impacts to their revenue growth.
The work experience is improving more than deteriorating. Overall trends from 2011 to 2012 reveal more aspects
of the work experience are improving, and to a greater extent than any decreasing areas. The highest area increased 7
percentage points, whereas the worst deterioration went down 3 percentage points. These changes to the general
work experience varied by region around the globe.
Many employers across the globe raised the bar and made investments in the top engagement drivers. In
addition to seeing perceptions of the work experience increase in general, we specifically saw improvements in all but
one of the top employee engagement drivers. These engagement driver increases indicate many employers focused
resources in the areas that are most important and have the greatest opportunity for engagement improvement. The
uptick we see in employee engagement is likely evidence of this focus.
Pay is one of the top drivers of engagement. Usually described as a hygiene factor of little consequence to
employee engagement, pay moved up in engagement driver ranking from #6 in 2011 to #3 in 2012. In addition,
positive perception scores of pay improved 2 percentage points from 2011. This finding has many implications for total
rewards strategies in an ever-changing economic and talent landscape.
Engagement drivers are not universal. Operating in the multicultural, multigenerational and cross-geographical
world represents new challenges for leaders trying to drive high levels of employee engagement. Organizations that
invest in understanding and managing the key drivers of engagement across their multiple constituencies will drive
performance in efficient, effective ways.

This research report provides insight into global employee engagement trends over the last few years. Employees are a
critical component to every organization, and their engagement serves as a barometer of organizational health. By
examining employee engagement, employers can create an engagement strategy to address employee motivation,
behavior, productivity and subsequent business results. This report concludes with suggested actions leaders and
managers can take to improve engagement levels and become better positioned for future success.

Aon Hewitt

Aon Hewitts Engagement Model

Aon Hewitt defines engagement as the psychological and behavioral outcomes that lead to better employee
performance. The Aon Hewitt model examines both the individuals engagement outcomes and the potential
engagement drivers that are part of the organizational work experience. This employee engagement model has been
tested, evolved and validated by over 15 years of research on millions of employees across a variety of companies and
industries, and throughout Asia Pacific, Europe, Latin America and North America. The model is further supported by
years of research in the area of organizational psychology.

Engagement Drivers

Job Security
Safety
Work/Life Balance
Communication
Diversity & Inclusion
Enabling Infrastructure
Performance Management
Customer Focus
Innovation
Talent & Staffing

Empowerment/Autonomy
Sense of Accomplishment
Work Tasks

n
n
n
n

THE WORK
EXPERIENCE

n
n
n

n
n
n

Brand/Reputation
Pay
Benefits
Recognition

Senior Leadership
BU Leadership
Supervision
Collaboration

Career Opportunities
Learning & Development

n
n
n
n
n

Engagement Outcomes

Say

Strive

Stay

We define engagement through three attributes that include the extent to which employees:
Sayspeak positively about the organization to co-workers, potential employees and customers
Stayhave an intense sense of belonging and desire to be a part of the organization
Striveare motivated and exert effort toward success in their job and for the company

2013 Trends in Global Employee Engagement

We believe employees need all three of these elements to be fully engaged. For example, it is difficult to say employees
are fully engaged if they strive to go above and beyond but do not really wish to stay with the organizationor worse, if
employees want to stay with an organization but make no effort to go above and beyond. The behaviors engaged
employees demonstrate lead to positive outcomes in key business drivers like customer satisfaction, operational efficiency
and revenue growth. A recent meta-analysis of 58 independent studies found compelling and overwhelming evidence
that employee attitudes and behaviors have strong correlations with customer satisfaction and indirect relationships with
financial performance.4
Aon Hewitts Engagement Model also covers Engagement Drivers. These are the areas over which management has a
great deal of controlthe action areas. Our extensive research formed the six major categories of the work experience
that include the work people do, the people they work with, opportunities, total rewards, company practices and
general quality of life.
The Aon Hewitt Engagement Model is the basis of the analysis in this report. Our analysis describes the baseline levels of
employee engagement and the employment experience, what has changed and what drivers engage the current
workforce. By identifying these drivers, employers can understand how to meet the needs of their employees and focus
on the specific areas of improvement that have the largest impact on engagement and business results.

Y. Hong, H Liao, J, Hu, K, Jiang, Missing Link in the Service Profit Chain:A Meta-Analytic Review of the Antecedents,
Consequences and Moderators of Service Climate, Journal of Applied Psychology, 98/2, 237-267 (2013)

Aon Hewitt

Trends in Global Employee Engagement

The economic recession that began in 2008 still looms over businesses across the globe. The complex landscape of
human capital challenges mixed with financial constraints forced organizations to make tough decisions on where to
invest their people, time and resources. These management decisions have impacted employee engagement levels and
perceptions globally.
The chart that follows shows overall trends in engagement scores, globally and by region. In 2012, the global
engagement score was 60%, up 2 percentage points from 58% in 2011. While on the surface this looks like a modest
improvement across the board, a look below the surface reveals that engagement levels fluctuatesometimes
substantiallyaround the world. Based on a five-year longitudinal analysis, we see these engagement levels range
globally from 72% and above for companies in the top quartile to 46% and below for companies in the bottom quartile
(see the Appendix on page 26 for the Global Engagement Meter).
Engagement level by region varies. Continued improvements in engagement scores in Europe were the strongest among
all four regions (up 5 percentage points, from 52% to 57%), followed by Latin America (up 3 percentage points, from
71% to 74%), contributing to the overall upward movement of global engagement. North America declined 1% (with the
U.S. declining 3% between 2011 and 2012) and Asia Pacific experienced no change.

Global Trends in Employee Engagement Scores

% of Engaged Employees

75%
70%

74%
71%

71%

71%

67%

65%
63%

57%
56%
52%

64%

63%

58%

60%

58%

58%
57%

60%

64%

59%

56%

55%

55%
51%

52%

2009

2010

2011

60%
55%

72%

Global
Latin America
North America
Asia Pacific
Europe

50%
2008

2012

2013 Trends in Global Employee Engagement

Contact Information
Pete Sanborn
Co-President
Performance, Reward & Talent
pete.sanborn@aonhewitt.com
Ken Oehler, Ph.D.
Global Engagement Leader
Performance, Reward & Talent
ken.oehler@aonhewitt.com

About Aon Hewitt

Aon Hewitt empowers organizations and individuals to secure a better future
through innovative talent, retirement and health solutions. We advise, design
and execute a wide range of solutions that enable clients to cultivate talent to
drive organizational and personal performance and growth, navigate
retirement risk while providing new levels of financial security, and redefine
health solutions for greater choice, affordability and wellness. Aon Hewitt is the
global leader in human resource solutions, with over 30,000 professionals in
90 countries serving more than 20,000 clients worldwide.
For more information on Aon Hewitt, please visit www.aonhewitt.com.

This document is intended for general information purposes only and should not be
construed as advice or opinions on any specific facts or circumstances. The comments
in this summary are based upon Aon Hewitts preliminary analysis of publicly available
information. The content of this document is made available on an as is basis,
without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or
organization for loss or damage caused by or resulting from any reliance placed on that
content. Aon Hewitt reserves all rights to the content of this document.
2013 Aon plc