Don’t Blame the Recession for Low Employee Engagement

‍Derek Coatney is Lattice’s Director of Product Management. Jonathan Liebman is a People Strategy Consultant with Lattice Advisory Services.

Picture this: You’ve just wrapped your company’s latest employee engagement survey, and there’s no sugarcoating it. The results are the lowest you can remember.

Naturally, you start combing the data looking for answers. Nothing stands out. And then it hits you: It’s the recession’s fault. 

You might want to reconsider. Engagement data from the thousands of companies that use Lattice suggests that economic uncertainty isn’t influencing engagement as dramatically as you might suspect. Put another way, it turns out that HR and leadership teams have more influence over survey scores than they appreciate.

Comparing 2022 and 2021

It’s been a challenging year. Inflation, layoffs, and global conflict (all issues bigger than work) weigh heavily on our minds. Those circumstances led us to take an early look at engagement benchmarks, something we don’t usually do until the end of the year.

The result? We analyzed year-to-date (YTD) engagement survey scores from companies using Lattice and found that the average degree of change was negligible: just +0.95. If anything, a very modest improvement. Note that for a question to be eligible for benchmarking, it must be used by at least 20 companies.

Naturally, we were skeptical. Because recession fears started in earnest halfway into the year, we decided to compare 2021’s scores to more recent numbers. So we then pulled engagement benchmarks starting from June 16, 2022 (when the Federal Reserve first raised interest rates this year). Going further, we then reported on only the last sixty days in search of a downward trend. 

In both scenarios, the story was largely the same: a modest improvement from 2021, in most cases. Only within the last sixty days did some benchmarks (shown below) drop below their 2021 scores. Even in those cases, the drop was less than a tenth of a point.

The above analysis references year-to-date benchmarking data. Customers will receive access to 2022’s final engagement benchmarks early next year. Learn how to use Lattice benchmarks here.

The Limits of Benchmarking

Our analysis was derived from benchmarks. Companies and their HR teams turn to benchmarks because they facilitate external comparison. They’re potentially useful for answering the question, “How do our engagement scores stack up to the competition’s?”

But perhaps that isn’t a question worth asking at all. For a host of reasons, benchmarks can mislead your post-survey action plans. They also don’t take into account factors like company culture, average employee tenure, or growth rate.

We know from external research that these factors do influence engagement. For instance, one global Bain & Company study found that organizational and societal culture could account for as much as a 73-point spread between the lowest and highest employee Net Promoter Scores.

For more on engagement benchmarking, read this story from Lattice Advisory Services.

Looking Inward for Answers

Don’t get us wrong: Benchmarks help us identify trends (or lack thereof) at a macro scale. We used benchmarks to write this story. But they can’t singlehandedly account for our everyday work experience. Benchmarks will give you a read on the weather outside, not the temperature inside your house.

Now, more than ever, companies should look inward and ask, "What can we be doing to better support our people during this time?"

At the end of the day, you are your closest peer: Internal data cuts and historical data will give you more insight than any external benchmark. For example, are your employees scoring higher or lower on psychological safety than they did earlier in the year? What do the survey comments have to say? These are the questions you should be asking before searching for external factors that might offer an explanation.

Put another way, focus on how you can pave your company’s path toward engagement. That may be the surest way of maintaining a highly engaged team in any weather.

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