Company loyalty and employee engagement report

A Kelly Services® Report

Company Loyalty and Employee Engagement in the Workforce -A European Perspective

2010 Kelly Global Workforce Index

kellyservices.com

1 I 2010 Kelly Global Workforce Index I Europe

Has the recession made employees more loyal?

The survey finds that one of the most profound effects of

the recession has been on the level of engagement between

employees and employers. A total of 20% say that as a result

of the economic recession, they now feel ‘more loyal’ to their

organisation than before the recession commenced. There are

11% who say they are now ‘less loyal’ and 69% who says the

recession has made no difference.

Even Gen Y, who are portrayed as having fleeting loyalty to

their employers, have emerged just as loyal as their older

counterparts.

It is clear that Europe’s economic difficulties have had an en-

during impact on the fundamental way that people think about

Introduction:

In late 2009 and early 2010, approximately 60,000 people from 16 countries in Europe responded to a workplace survey

developed by Kelly Services. The Kelly Global Workforce Index (KGWI) examined attitudes and trends on the topic

of company loyalty and employee engagement.

Survey respondents ranged in age from 18 to 65 and comprised the three generational groups: Generation Y (age 18 – 29),

Generation X (age 30 – 47), and the Baby Boomer generation (age 48 – 65). Respondents were either employed within

a variety of industries, ranging from information technology to finance, or were unemployed and searching for future

work opportunities.

The questions were as follows:

• As a result of the recession, are you more or less loyal to your employer? If more loyal, why? If less loyal, why?

• How committed or ‘engaged’ do you feel with your current employer?

• What one thing would make you feel more committed or ‘engaged’ with your job?

• What one factor would be most likely to cause you to leave your organisation?

• How important is a company’s reputation when considering whether to join or remain working with an organisation?

• What is the most important factor in determining an organisation’s reputation?

• What level of confidence do you have in your current company’s ability to be a good corporate citizen

and act responsibly?

Company LoyaltyEurope’s economic recession has caused massive social and business upheaval with thousands of workers laid off and scores

of firms shut down. It has also had a lasting impact on workers who have lived through it, not least on younger workers who

experienced their first major economic shock.

Less loyal No differenceMore loyal

Gen Y(18-29)

20%10%

Gen X(30-47)

Baby Boomers (48-65)

Total

0% 20% 40% 60% 80%

69%

68%

68%

69%

19%13%

21%11%

20%11%

Economic Recession and Employee Loyalty

As a result of the recession, are you more

or less loyal to your employer?


ees who are seeking both an understanding of business direc-

tion, and reasons to remain optimistic.

Key Influences on Employee Loyalty


or less loyal to your employer? If yes, why?

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

Benefit coverage improved or remained steady

Compensation / pay improved or remained steady

Availability of training / development

Active communication

Positive company moral

Positive management

15%

29%

34%

36%

44%

52%

(multiple responses allowed so percentages add to more than 100)

By contrast, those workers that are now less loyal to their em-

ployer since the economic downturn cite reasons such as poor

management, low company morale and poor communication.

Lower salary and benefits are also a factor, but a relatively

minor one.

The survey demonstrates how employers that have effectively

managed their staff through one of the most challenging

periods in recent history have emerged with a workforce that is

more devoted, and likely to be more energized and productive

as the economy recovers.

Key Influences on Employee Loyalty


or less loyal to your employer? If no, why?

France

Portugal

Sweden

Belgium

Luxe

mbourg

Irelan

d

Switzerla

ndUK

Hungary

Denmar

kIta

ly

Poland

Norway

Netherla

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Russia

German

y0%

10%

20%

30%

40%

35%

32%

28%

25%23%

21% 21% 21% 21%20% 20%

18% 17%16%

14%

10%

So what have some firms done to make their staff more loyal?

Those firms with positive management, good morale and

active communication have been most successful in retain-

ing their staff during the worst of the downturn. Those three

factors were more important than pay and benefit levels in

keeping a workforce intact.

This suggests that a key to surviving the recession rests in man-

agers who maintain an open dialogue with staff about strate-

gies for the future and upcoming challenges. A realistic, but

positive, management mindset appears to rub off on employ-

their jobs, and the relationship they have with their employ-

ers. While some have clearly been unsettled by the economic

upheaval and now feel less loyal, there are twice as many who

have emerged with heightened loyalty.

At least in the short term, this enhanced loyalty is likely to

translate into a more engaged, stable and productive work-

force. Following the end of the skills shortage in 2008, and

during the course of the recession, there has been a shift in

bargaining power away from labour and in favour of employ-

ers. In light of current labour market conditions, it is unlikely

that this bargaining equation will change in the near term.

The results show quite dramatic differences amongst individual

countries, led by Norway, Ireland, U.K. and Switzerland, all with

25 percent or more of their respondents now more loyal to

their employers. Germany, Belgium, France, Italy, Russia and

Luxembourg all fall near the European average, while Nether-

lands, Hungary, Poland, Portugal and Denmark are all below it.

Economic Recession and Employee Loyalty


or less loyal to your employer? (% of More loyal)

Decrease in benefitcoverage

Decrease training / development

Decrease compensation / pay

Poor communication

Low company moral

Poor management

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

25%

33%

36%

37%

47%

50%

(multiple responses allowed so percentages add to more than 100)

It puts to rest the fear that the tail end of the recession would

result in a period of instability, as employees hunt for new jobs

after enduring economic difficulties. Rather than workers fleeing

their employers, the recent events have strengthened workplace

bonds.


Baby Boomers are more engaged

In spite of the economic gloom that has pervaded much of Eu-

rope for the past 18 months, a total of 36% say they are ‘totally

committed’ to their current employer, while 32% say they are

‘somewhat committed.’

Yet there are significant differences in levels of engagement

across European countries and generations.

The level of engagement is considerably higher amongst Baby

Boomers (48% ‘totally committed’) as compared with Gen X

(38%) and Gen Y (32%).

Employee Engagement

How committed or ‘engaged’ do you feel with your

current employer?

Across Europe, there are intriguing differences amongst coun-

tries on the degree of employee engagement.

Those workers who profess the greatest engagement with

their bosses are in a small group of standout countries led by

Poland and Sweden, where 65% are ‘totally committed’ to their

employer, followed closely by Norway (63%).

A group of 10 countries with relatively high to modest levels

of engagement includes Denmark, Netherlands, Switzerland,

Luxembourg, Ireland, Belgium, Germany, UK, France and Italy.

At the bottom, and below the European average, are Portugal

(28%), Hungary (25%) and Russia (16%).

It is notable that the powerhouse economies of Europe – Ger-

many (43%), UK (42%) and France (41%) all cluster around a

higher-than-average score.

Employee engagement is considered a critical element in the

complex web that contributes to staff morale and productivity.

Energized employees are recognised as an elusive ingredient

that makes the difference between average and high-perform-

ing, productive workplaces. The key to this difference involves

both rewards and challenges. Pay is an important element, but

it is not the only factor, and not even the most important.

When asked, employees say that interesting and challenging

work and meaningful responsibility are the most important fac-

tors. Everyone wants to be valued in their role and take pride

in what they do.

Workers who are given tasks that push them to acceptable

limits, who learn on the job and who feel they are making a

contribution, will be more committed to their work.

Employee EngagementIt is hard to create a committed or ‘engaged’ workforce in the midst of a severe economic downturn, but many organisations are

managing to keep their staff focused and motivated. Contrary to expectations, the economic slump has not been as negative on

workplace morale as some had imagined.

Neutral

UncommittedSomewhat committed

Totally committed

Employee Engagement

How committed or ‘engaged’ do you feel with your

current employer?

0%

10%

20%

30%

40%

50%

60%

70%

France

Portugal

Sweden

Belgium

Luxe

mbourg

Irelan

d

Switzerla

nd UK

Hungary

Denmar

kIta

ly

Poland

Norway

Netherla

nds

Russia

German

y

65% 65%63%

53%

47% 46% 45% 44% 43% 43% 42% 41%39%

28%

25%

16%

0% 10% 20% 30% 40% 50%

Gen Y(18-29)

Gen X(30-47)


Total

32%33%

24%11%

38%31%

20%11%

48%24%

16%11%

36%32%

21%11%


And, the one factor most likely to cause them to resign is a lack

of opportunity for advancement.

Leading Causes of Job Displacement

What one thing would be most likely to cause you

to leave your organisation?

Strengthening Employee Engagement

What one thing would make you feel more

committed or ‘engaged’ with your job?

Concern with corporate reputation

Stress

Inadequate work / life balance

Poor communication

Poor salary / benefits

Poor management

Opportunity for telecommuting

A better work / life balance

More or improved training

More meaningful responsibility

Higher salary / benefits

More interesting / challenging work

0% 10% 20% 30% 40% 50%

2%

10%

12%

12%

21%

42%

It’s the same when employees are asked about what would

cause them to leave their job. Pay is a factor, but it is less im-

portant than poor management, weak communication and lack

of opportunity for advancement.

Of the issues that would influence a person to leave their job,

least important are factors such as concern with corporate

reputation, stress and inadequate work/life balance.

Leading Causes of Job Displacement

What one thing would be most likely to cause you

to leave your organisation?

0% 10% 20%

2%

4%

8%

10%

15%

16%

Younger workers, notably Gen Y, are particularly sensitive to

situations with a lack of opportunity for advancement, while

Baby Boomers are more alert to weak management.

The data suggest that personal job satisfaction, learning and

professional development are critical elements when it comes

to building a productive workplace. Across the board, the

single factor that would make all workers more engaged with

their employers is not more money, but more interesting or

challenging work.

0% 10% 20% 30% 40%

Concern with corporate reputation

Stress

Inadequate work / life

balance

Poor communacation

Poor salary /

benefits

Poormanagement

Poor staffmoral

Lack of opportunities for

advancement

Baby Boomers

Gen Y

Gen X


Corporate Reputation and Employee EngagementAn organisation’s reputation plays a critical role in the way that employees interact with other staff and perform in their jobs.

Workers generally want to take pride in their organisation and the work that they do. Corporate reputation is a major factor

in what attracts them to an employer and what keeps them there.

Reputation counts

When asked about the importance of corporate reputation in

choosing a job, or deciding to stay in a particular position, a

total of 27% say it is extremely important, 49% say it’s some-

what important, 17% are neutral and 6% say it’s unimportant.

There is some distinction according to age groups. The

percentage of those who think corporate reputation is ‘very

important’ as a job feature, climbs steadily with age from 24%

of Gen Y, to 29% of Gen X, to 35% of Baby Boomers.

Corporate Reputation and Job Appeal

How important is a company’s reputation

when considering whether to join or remain

working with an organisation?

Neutral

UnimportantSomewhat important

Very important

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

Gen Y(18-29)

Gen X(30-47)


Total

24%50%

20%7%

29%49%

16%6%

35%45%

14%5%

27%49%

17%6%

There are also interesting variations across countries, ranging

from more than a third who think it’s ‘very important’ in Ireland,

U.K., Italy Poland and Russia, to 20% or less in Sweden, Bel-

gium and Denmark, and a miniscule 9% in France.

The way that employees form opinions about corporate

reputation reflects a surprisingly pragmatic view about what’s

important in building public perception. The most important

factor to employees is the quality of products and services,

cited by 44% of respondents. Also important is the quality of

the management (25%), and the quality of employees (12%).

But, after these three factors, other considerations fall far down

the list, including global presence, corporate social responsibi-

lity initiatives, financial performance and longevity.

This may come as a surprise because organisations spend

considerable sums and go to extraordinary lengths to enhance

their corporate reputation.

Many initiatives involve community, social or environmental

programs. Yet, in the eyes of employees and prospective em-

ployees, it really all comes down to what firms produce,

and the quality of those who lead them.

0%

10%

20%

30%

40%

50%

France

Portugal

Sweden

Belgium

Luxe

mbourg

Irelan

d

Switzerla

ndUK

Hungary

Denmar

kIta

ly

Poland

Norway

Netherla

nds

Russia

German

y

41%

37%

33% 33% 33%31%

26%25% 25% 25%

24% 23%

20% 19%

14%

9%

Corporate Reputation and Job Appeal

How important is a company’s reputation

when considering whether to join or remain

working with an organisation? (% of Very important)


There are also notable differences in the way employees from

different nations reflect on corporate reputation.

While corporate social responsibility initiatives are rated rela-

tively low in priority across the board, they are given greatest

priority in Denmark and Netherlands. Meanwhile, factors such

as financial performance and longevity are most prized in Rus-

sia. Workers in Russia are also the most impressed by global

presence. Workers in Poland and Norway place greater-than-

average weight on ‘quality of employees.’

For employees, their employer’s corporate reputation is of

considerable ongoing interest. How a reputation is either en-

hanced or diminished is likely to have a significant bearing on

an employee’s immediate career prospects. In this respect both

employers and current employees have some shared interest in

ensuring that corporate reputation is protected.

In the aftermath of the global financial crisis, which saw some

corporate reputations plummet, what do workers have to say

about how their bosses manage this reputation?

Survey respondents were asked: What level of confidence do

you have in your current company’s ability to be a good corpo-

rate citizen and act responsibly?

Slightly less than one quarter (24%) are ‘very confident’ and

42% ‘somewhat confident’ in their firm’s ability to be a good

corporate citizen and act responsibly. Gen Y is slightly more

confident than older generations.

Across the international spectrum, there are very marked

differences in employees’ perceptions about the way their

employers will manage their company’s reputation. Norway,

Ireland, U.K. and Luxembourg all share relatively high levels of

confidence in the management of their firm’s reputation. On

the other hand, there is low confidence in Hungary, France,

Italy and Portugal.

Confidence in Corporate Reputation

What level of confidence do you have in your current

company’s ability to be a good corporate citizen

and act responsibly? (% of Very confident)

Somewhat confidentNeutral

Pessimistic

Very confident

0% 10% 20% 30% 40% 50%

Gen Y(18-29)

Gen X(30-47)


Total

24%42%

24%10%

22%40%

23%15%

24%36%

22%18%

23%41%

24%13%

Hungary

Netherla

nds

Portugal

Italy

Denmar

k

Norway

Poland

Irelan

d

German

y

FranceUK

Luxe

mbourg

Switzerla

nd

Belgium

Sweden

Russia

0%

10%

20%

30%

40%

50%45%

44%

39%

30% 29%28%

27% 27% 27%

23%22%

21%19%

18%16%

13%

0% 10% 20% 30% 40% 50%

Longevity

Financial performance

Social responsibility /corporate citizenship

Global presence

Quality of employees

Quality of management /leadership

Quality of productsand services

4%

4%

5%

5%

12%

25%

44%

Factors Impacting Corporate Reputation

What is the most important factor in determing

an organisaton’s reputation?

Confidence in Corporate Reputation

What level of confidence do you have

in your current company’s ability to be a good

corporate citizen and act responsibly?


About Kelly Services

Kelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions. Kelly offers a comprehensive array

of outsourcing and consulting services as well as world-class staffing on a temporary, temp-to-hire and permanent placement

basis. Serving clients around the globe, Kelly provides employment to 480,000 employees annually. Revenue in 2009

was $4.3 billion.

For more information about the KGWI findings, please visit kellyservices.com or contact the EMEA Marketing Department

by e-mail ([email protected]) or by phone (+41 32 737 1800).

ConclusionIt is generally accepted that loyalty is something to be earned; part of a two-way deal that results in greater trust

and understanding on both sides. That seems to explain, in part, what has occurred in the workforce since the start of the global

economic recession.

Firms that have been able to survive the downturn, and have

remained engaged with their workforce are now experiencing

an unanticipated outcome – a workforce that is more loyal,

engaged and productive.

Given the considerable efforts that firms undertake in order

to build employee engagement, it is ironic that the biggest

economic collapse in a lifetime has achieved precisely that

outcome.

Perhaps more importantly, it demonstrates the management

style that is needed to build lasting and productive partner-

ships with the workforce – in good times as well as bad.

Overall, the findings reflect a relatively low level of employee

confidence that their employer’s brand will be well managed.

This may be a consequence of the economic collapse, which

demonstrated how fragile brand reputation can be, and how

quickly it can evaporate. Employees have seen some of the

biggest names in the corporate world disintegrate as a result

of poor administration, and likely expect that it will happen

again. Twice as many Baby Boomers as Gen Y workers are pes-

simistic about their employer’s ability to manage reputation.

It also reveals that the reputation of an organisation is a key

factor for employees who are evaluating their career options.

While corporate reputation is highly valued by employees, it is

also fragile, and employees are far from certain that it will be

safeguarded.

Employee loyalty and engagement will fluctuate according to

business and economic cycles, but employers now have fresh

insight into the way that the most recent economic collapse

has impacted the psychology of the workforce.

Employers who learn from this crisis will be able to build a

more productive workforce for the future.

Business

Company loyalty and employee engagement report