Study: Employee loyalty, engagement plummet to 12-month low

New research confirms that workers are weighing their options—and eager to find greener pastures.

By Robby Brumberg      @robbybrumberg      
Engagement plummets to 12-month low

Are you going the extra mile to make your employees feel valued, heard, appreciated and cared for right now?

If not, companies should brace for a flurry of emails that convey some variation of, “I quit.” Amid a historic spike in resignations, the onus is on organizations to do more to prevent burnout. But what can be done to reverse the tide?

According to data collected by Energage, there has been a steady, sharp drop in employee engagement levels since the start of the year. And the drop shows no sign of stopping.

“What we’re hearing from employees through this data is that they are rethinking their commitment to their employers,” says Greg Barnett, chief people scientist of Energage. “We’re seeing lower levels of loyalty as employees leave their employer for a new one.”

Energage’s survey data, which was collected from employees at more than 4,000 companies, reveals that employee engagement levels have plummeted lower than any time during the pandemic. Energage’s data found that engagement sharply increased in April 2020, as companies bent over backward to accommodate employees. After that initial spike, engagement declined but started inching up toward the end of the year, before falling again in 2021.

(Image via Energage)

“The new year started with a one-point decline in engagement and has fallen ever since,” says Barnett.

Seeking greener pastures

Energage’s research shows that some industries are enduring rockier relationships with employees than others. Education, Hospitality, Utilities and Telecommunications, Services, and Manufacturing (jobs where frontline workers deal with customers) are experiencing large decreases in employee engagement so far in 2021, off by six points or more compared to the second quarter of 2020.

(Image via Energage)

“Employee burnout and stress has been a significant factor over the last year, and employees in these industries have been especially hard hit,” says Barnett. “In many companies, initial hiring freezes and layoffs have been hard to reverse, leading to more work for fewer employees. In other situations, burnout is high because remote work has created situations where employees never feel like they are off the clock.”

Recapturing workers’ attention, loyalty and trust

The data reveals that as employee loyalty wanes, workers are less willing to recommend their companies to others as a good place to work. That finding emphasizes the potential ripple effects of widespread discontentment. In other words: Unhappy employees can dramatically damage morale and productivity and recruiting efforts, too.

“Employees are at the point where they can reflect on their company’s response to COVID-19 and are judging those actions in hindsight,” said Doug Claffey, founder and chief strategy officer of Energage. “While the worst of the pandemic appears to be behind us, the actions taken by employers have left some employees questioning not only their loyalty, but also their career choice. This is especially true in Education and Hospitality.”

This data, coupled with dramatic decreases in “intent to stay” percentages, signifies that whatever positive vibes or reputational gains that developed early in pandemic are quickly evaporating.

Despite these challenges, Claffey points out that focusing on the past won’t likely be helpful. Companies should immediately improve workers’ current situations—and strive to present a hopeful vision for the future.

“Organizations should resist the urge to overanalyze declines in employee engagement, and instead focus on improvement going forward. There are plenty of challenges and opportunities ahead that will impact future engagement, including how to run a hybrid workforce, keep employees safe, and balance new work/life flexibility issues,” says Claffey.

Companies would be wise to treat these issues of declining engagement and loyalty as an emergency. If you don’t, you might not have a staff left at all.