Towers Watson 2012 Global Workforce Study - Singapore

2012 Global Workforce Study Singapore report

Singapore executive summary: 2012 Global Workforce Study

Table of contents

Global Workforce Study overview 4

Key Issues

Issue 1 – Sustainable engagement 5

Issue 2 – Employee retention risk 5

Issue 3 – Issues of leadership and management 6

Issue 4 – Issues of career advancement 6

opportunities

Issue 5 – Understanding total rewards and EVP 7

Recommendations for Employees 8

Tips: Engaging and Enabling Middle Managers 8

The importance of sustainable engagement 9

Key terms 10

About the survey 10

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The Towers Watson 2012 Global Workforce Study (GWS) reveals that one-third (35%) of workers across 28 countries are highly engaged in their work while others are struggling to cope with work situations that do not provide sufficient support or emotional connection. At a time when employers need to count on employees more than ever to meet their growth objectives, this finding poses a disturbing risk. Workers may be reaching a tipping point in maintaining the connection to their companies that yields consistent productivity.

While there are variations in employee attitudes across the regions, influenced by local economic conditions, the GWS shows that many employees are working more hours, feeling more stress and are worried about their financial future. In some countries, they are also risk-averse. The result for employers is heightened performance risk – from lower productivity and higher rates of absenteeism and turnover to increased costs for chronic illnesses.

Global Workforce Study overview

Less than one third of Singapore workers are highly engagedOnly 28% of employees in Singapore are highly engaged at work. Nearly three quarters of them (72%) either feel unsupported, detached or are disengaged. Many employees lack the rational and emotional connection to their companies needed to spur them to be consistently productive and to go the extra mile.

The proportion of highly engaged employees in Singapore is also lower than in the Asia Pacific region (39%) and globally (35%). Moreover, the percentage of disengaged employees in Singapore (35%) is highest compared with the regional (27%) and global (26%) workforce. While these findings could be due to cultural differences in the way people respond to questions about work engagement, we nevertheless feel that they warrant attention.

Out of the overall workforce in Singapore, the middle managers are among the least engaged. Only 23% of Singapore middle managers are highly engaged, lower than for the workforce as a whole and about half the global average of 44%.

It is heartening however to see that high potential employees are more engaged. In Singapore, 38% of high potential employees are highly engaged, whereas only 28% of workers in the country are highly engaged.

The GWS points to a low level of sustainable engagement in the Singapore workforce. An equally significant finding is the threat of high employee turnover.

One in three employees in Singapore (34%) is likely to leave his/her current employer within the next two years.

The main reason appears to be the search for better career prospects. Almost half (46%) of Singapore employees feel they have to join another organisation in order to advance to a job at a higher level.

A perceived lack of career advancement opportunities, dissatisfaction with immediate managers, and poor perception of pay and benefits are some of the reasons why employees do not feel sustainably engaged in their jobs.

Given the importance of a highly engaged workforce in achieving good corporate performance, the GWS serves to inform employers in Singapore of the attitudes and concerns of employees that impact their engagement at work. The study also provides important insights into the work environment that can be used to enable employees, enhance employer-employee connection and raise performance.

Key issue analysis

Issue 1 – Sustainable engagement

Sustainable engagement is the intensity of employees’ connection to their organisations, marked by a committed effort to achieve work goals (being engaged) in environments that support productivity (being enabled) and energised performance (being energized).

Sustainable engagement is the sum of all three elements – traditional engagement, defined as employees’ commitment to the organisation and willingness to give effort to their employer, enablement, defined as having the tools, resources, and support to get work done efficiently, and energy, defined as a work environment that actively supports physical, emotional and interpersonal well-being. Effective employee performance depends on all three elements and will only hold over time with all three in place.

Studies have shown a clear relationship between high levels of employee engagement and improved financial and operational results. When sustainable engagement is low companies become vulnerable to a drop in productivity, poorer customer service and higher rates of absenteeism and turnover.

In Singapore, where nearly three quarters of the workforce are not highly engaged, this is cause for concern. One in five workers in Singapore (20%) feels unsupported, that is, while they are willing to work harder, they are not given the tools, the resources or the support to do their jobs effectively. A further 17% are detached and lack the willingness to go the extra mile at work even though they receive the support they need. About a third of the workforce (35%) is disengaged.

Highly engaged middle managers are well positioned to influence employee engagement positively within an organisation. However, in Singapore, fewer than one out of four middle managers are highly engaged and this certainly calls for attention.

Issue 2 – Employee retention risk

With one in three employees likely to leave their current employers within two years, worker retention is a critical issue in Singapore.

Employers expend much time and effort to select and recruit the right employees for their organisation, and further invest in employee training. When employees do not stay long in their jobs employers’ costs of talent attraction, retention and management increases. Furthermore, a high employee turnover is disruptive to the business.

The GWS reveals that 34% of Singapore employees wish to leave their current organisations but three groups in particular pose a higher risk. Younger employees (under the age of 30 years) (51%), middle managers (44%) top performing and high potential employees (40%).

Employers should be especially concerned about losing middle managers. A high turnover among middle managers whom they have invested significant amount of training in, is particularly detrimental to an organisation. When middle managers leave, they impact the organisation’s succession planning as they are often the very people in line for promotion to leadership positions. Most importantly, middle managers are the conduit between senior leadership and the people on the ground. When they themselves are not highly engaged and choose not to stay, the morale of other employees can be affected.

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Issue 3 – Issues of leadership and management

Singapore employees do not rate their senior management well. Less than a third (31%) of employees agree that their senior management does a good job of developing future leaders. Only 39% believe that senior leadership has a sincere interest in employees’ well-being. Only 42% agree that senior management does a good job of managing costs.

Employees are also critical of their immediate managers. They do not think their managers spend enough time handling the people aspects of the job nor provide frequent recognition for work done well. However, they think that their immediate managers are good in certain aspects: task-oriented, assign tasks suited to the subordinates’ skills and abilities, able to communicate goals and assignments clearly and treat their subordinates with respect.

The middle manager in Singapore is caught in-between not receiving sufficient input from the top for self-development and at the same time viewed critically by subordinates. This may account for why middle managers register low retention and engagement levels.

Only half of Singapore workers (52%) agree that their immediate manager is effective in his/her job. A closer look at the data reveals that at every level manager effectiveness is not rated highly. Only 43% of first-line supervisors view their managers as effective. Similarly, only 51% of middle managers who are themselves managed by senior leaders in the organisation agree that their leaders are effective.

Issue 4 – Issues of career advancement opportunities

Singapore employees feel they lack career advancement opportunities within their organisation. Almost half (46%) of the employees believe they have to join another organisation in order to advance to a higher level. This perception is stronger among workers in three groups: middle managers (54%), high potential employees (51%) and those that are under 40 years old (51%).

When asked about career advancement, employees rated their organisations lower on a few aspects, that then informs employers on things to focus on. Firstly, organisations could do better at providing coaching to improve employee performance and provide career planning tools and resources. Secondly, employees expect more clarity on opportunities for career advancement as well as promotion for the most qualified employees. Thirdly, organisations need to communicate clearly how the performance management process works.

Employees have indicated a willingness to take responsibility for their careers. The large majority of employees (82%) agree that they should take ownership of their own careers or that they have joint ownership with their managers.

The GWS finds that Singapore employees are career-driven and are willing to seize opportunities that come their way, even if the career advancement opportunity necessitates a re-location to workplaces outside of the country.

Four out of five workers (83%) are willing to re-locate for career advancement but they are selective about their destinations. The proportion of workers who are willing to move to certain locations (61%) is nearly three times as high as the proportion of workers willing to move anywhere (22%).

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In summary

Three quarters of the entire Singapore workforce are not highly engaged and one third is likely to leave their current organisations within two years. Employees feel that their immediate managers are lacking in effectiveness and they do not rate their senior management highly either. The majority of workers still give a lot of importance to “monetary” rewards and this coupled with a poor perception of pay equity and benefits affects their engagement with their organisations.

Issue 5 – Understanding total rewards and EVP

Singapore employees show a very strong preference for monetary rewards, consistently choosing larger base pay increases over more paid time-off, more bonus opportunity and more guaranteed retirement benefit, even over more career advancement opportunity.

However, they have a poor perception of pay equity and benefits and this affects their engagement. On average, about one third of employees feel that they are paid fairly compared with people in other companies who hold similar jobs (32%) and that they are paid fairly compared with people in their own companies who hold similar jobs (36%).

At the same time, employees are increasingly concerned about retirement benefits. Only one in five agrees their organisation’s retirement benefits meet their needs.

A closer analysis of the GWS data reveals that employees may be highly focused on pay and monetised rewards because they may not recognise that they have a bigger employment deal. The reason is likely to be that their organisations have not communicated clearly to their employees about their total rewards and the Employee Value Proposition (EVP).

Total rewards include financial rewards given for performing a work role, such as base pay and allowances, performance-based rewards such as bonuses and incentives, plus career and environmental rewards such as career development experience and training.

The EVP, also called the employment deal, is the ‘give’ and the ‘get’ between the employer and the employee. It is the tangible and non-tangible rewards that an employee expects to get in exchange for his commitment, discretionary effort and performance for the organisation. An EVP could include the purpose and values of an organisation, the job, the culture and the people aspects, and total rewards.

The GWS shows that employees in companies that have communicated the EVP effectively feel better about their pay. For instance, 55% of employees in companies with high EVP effectiveness think they are paid fairly compared with others who hold similar jobs; 48% think their base salary compares favourably to that offered in other companies; 48% think their bonus opportunity compares

favourably. Conversely, in companies with low EVP effectiveness, only 17% of employees think they are paid fairly compared with others; 17% think their base salary compares favourably with others; and 20% think their bonus opportunity compares favourably.

Even when organisations use technology to communicate the value of their total rewards programme, only about one third of employees (34%) agree that they do a good job.

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Tips: Engaging and Enabling Middle Managers

Employers should pay special attention to the middle managers because they play a pivotal role in the organisation. Their engagement and enablement can have a big impact on the overall employee engagement. Here are some tips on how to address the challenge of the middle manager.

1. Select the right person for the job. It is important who you select to be the manager of a group of employees. Are you selecting the person with managerial skills or only the best individual performer?

2. Define the role and responsibility of the manager. Define the manager’s role and responsibilities so that it is clear to the middle manager what has to be done to deliver effective performance. Define a role for success, not a role for failure. The goals and objectives must be achievable

3. Train and coach the manager. Help the manager to succeed. Give the necessary and right training so that the manager can manage his/her own performance and help subordinates to improve on their performance. Ensure that senior management are good role models and are coaching and mentoring the middle managers.

4. Empower the manager to be effective. Once you have defined the role and coached the manager, empower him/her to do the job well. Do not let individuals and processes get in the way.

Recommendation for Employers

Engage and enable middle managers

The middle manager in Singapore is less engaged and is at higher risk of leaving the organisation within two years. He/she feels poorly on many aspects including lack of advancement opportunities, and having to face substantial obstacles at work.

Companies can help their middle managers to improve their own performance management and help them set and progressively achieve their own career progression goals. Senior leadership can increase their interaction with middle managers to provide greater guidance and coaching. They need to communicate more clearly to middle managers on promotions, career advancement and performance management.

Companies also need to remove obstacles that hamper the work of middle managers. This will enable them to spend more time on the people aspects of the job, such as guiding their subordinates and building relationships.

In addition, companies can equip their middle managers with the skills to coach their subordinates to raise their performance.

Communicate, communicate, communicate

Clear communication is inherent in good management. GWS shows that Singapore employees are critical of their organisations for failing to communicate effectively. This includes communication on various aspects such as total rewards, career advancement and performance management.

Companies should communicate how employees can advance in their career, what are the available tools and resources to help them improve performance, and how the performance management process works.

Explain total rewards more effectively

Employees in Singapore are highly focused on base pay and bonuses. In a tight labour market especially, pay and monetary compensation are often used to weigh competitive job offers.

Simply communicating to employees about pay and monetary rewards is not good enough. The focus should be on the ‘right pay’. Employers need to optimise their total rewards programme that is based on a better understanding of employee

needs, including healthcare programmes or retirement benefits.

While companies need to pay competitively and offer the ‘right pay’, it is even more important for them to communicate effectively to employees about total rewards and the Employee Value Proposition (EVP).

Define, communicate and execute the EVP

The EVP can serve to retain, engage and motivate employees to drive business success. The more aligned employees are with the EVP, the more they will raise their level of discretionary effort and their ability to deliver superior performance. Used wisely, an EVP can lead to direct business benefits.

Employers need to articulate the EVP clearly so that it is well understood by employees. We recommend that employers use the EVP as a strategic talent management tool.

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Towers Watson research conducted over the last decade has demonstrated unequivocally the value of employee engagement as a driver of improved business performance. Our unique Sustainable Engagement Framework was developed and validated from extensive analysis of our organisational survey and Global Workforce Study data, coupled with current theories in organisational science.

Sustainable Engagement is the sum of three distinct elements. One is traditional engagement, defined as employees’ commitment to the organisation and willingness to give effort to their employer. The second is enablement, defined as having the tools, resources, and support to get work done efficiently. The third is energy, defined as a work environment that actively supports physical, emotional and interpersonal well-being.

Enablement and energy are critical. In the last few years, with employers struggling to manage costs and remain competitive globally, the importance of enablement and energy has become really clear. Effective performance depends on all three elements of sustainable engagement. Companies that do not take steps to improve on-the-job support for employees and create a sense of attachment to the organisation will have lower levels of sustainable engagement and productivity, directly affecting their ability to grow their business.

The importance of sustainable engagement

Companies with low

engagement

Companies with high

engagement

Companies with high

sustainableengagement

9.9

14.3

27.4

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ratin

g m

argi

n

3x higher

Source: Towers Watson’s global normative database.

Figure 02. Sustainable engagement and business results

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Figure 03. From engagement to sustainable engagement

FeelEmotional/affective attachment to the

organisation

ThinkRational/cognitive

understanding of the organisation’s strategic goals, values, and how

employees �t

ActMotivation and

willingness to invest discretionary effort

to go above and beyond

Engaged

Enabled

Energised

A local workenvironmentthat supportsproductivity

andperformance

Individualphysical

interpersonal and emotional

well-being at work

Engagement

Rational

Motivational

Emotional

Participating markets for the studyAsia PacificAustralia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan

Europe and the Middle EastBelgium, France, Germany, Ireland, Italy, Netherlands, Russia, Spain, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom

Latin AmericaArgentina, Brazil, Mexico

North AmericaCanada, United States

Key terms

Employee Value Proposition (EVP)An Employee Value Proposition is the experience offered by an employer in exchange for the performance and productivity of an employee. From the employer perspective, a strategically designed EVP attracts, retains, engages and motivates employees to drive business success. From the employee perspective, employee’s connection with the EVP determines their level of discretionary effort in bringing the company mission, vision and values to life.

About the survey

The Towers Watson 2012 Global Workforce Study provides a comprehensive snapshot of the attitudes and moods of employees globally in a period marked by dramatic and continuing economic swings, deep-rooted financial concerns, political turmoil and regulatory change.

The Global Workforce Study covers more than 32,000 employees selected to represent the populations of full-time employees working in large and mid-sized organisations across a range of industries in 29 markets around the world. The GWS surveyed 1,002 respondents in Singapore.

The study is designed to help companies better understand their diverse employee segments and the factors that influence employee performance on the job by gauging changing attitudes that affect attraction, retention, engagement and productivity.

Contact

For further information, please contact your Towers Watson consultant, or

Amrita Prasad +65 6389 7443 [email protected]

Jell Espinosa +65 6389 7439 [email protected]

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Copyright © 2012 Towers Watson. All rights reserved.TW-AP-13-30280

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About Towers WatsonTowers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of employee benefits, talent management, rewards, and risk and capital management.