What to do about the disengaged workforce?

It’s the end of one year and the start of another, and although there is a certain artificiality involved, the torrent of year-end prognostications sometimes can lead to something good. I’ve made a haphazard and totally unscientific survey, and here’s some of the things I have seen mentioned — and some that I haven’t seen enough.

A lot of mentions of HR software becoming more socialized, although calling it ‘Total Employee Lifecycle Management’ doesn’t make it sound too palatable. Nonetheless, social HR is an obvious and growing trend. Witness offerings like SmartRecruiters, that start at the hiring end of the HR pipeline, and make the process of posting jobs, managing candidates, and tracking the status of applicants as simple as possible.

But in the frenzy to ‘unlock the value of employees throughout their entire lifecycle’ — cringe — we are skirting some well-known truths. The most important, perhaps, is that we have seen an enormous swing in engagement in the past decades. In late 2011, Gallup research showed that the majority of American workers were disengaged:

Majority of American Workers Not Engaged in Their Jobs via Gallup

Seventy-one percent of American workers are “not engaged” or “actively disengaged” in their work, meaning they are emotionally disconnected from their workplaces and are less likely to be productive. That leaves nearly one-third of American workers who are “engaged,” or involved in and enthusiastic about their work and contributing to their organizations in a positive manner. This trend remained relatively stable throughout 2011.

Highly-educated and middle-aged workers are more likely to be disengaged, and men more likely to be than women. But Gallup doesn’t offer any real analysis of what’s going on. There doesn’t seem to be any science in their thinking, aside from number crunching.

However, there is some actual science out there that might be able to explain these trends. John Helliwell is a well-known economist who has undertaken basic research in to social capital and trust in the workplace. He has worked with Robert Putnum (Bowling Alone) and others to try to dig into trust — and its lack — at work. He had the insight that people might be trading off other economic factors in exchange for work where they feel more trusted, and he did the research to poke at that:

How’s The Job? Well-Being And Social Capital In The Workplace, John Helliwell and Haifang Huang, (from Industrial and Labor Relations Review, Vol. 63, No. 2 (January 2010))

Surveys that collect measures of life satisfaction in conjunction with measures of social capital provide evidence that social capital (measured by marriage and family, ties to friends and neighbors, civic engagement, trustworthiness, and trust) is strongly linked to subjective well-being (Helliwell and Putnam 2004). The research so far has largely ignored life satisfaction and social capital in the workplace. Given the fact that workers spend about half of their weekday waking hours on the job, this omission is too important to ignore. Fortunately, the three surveys we use in this paper all provide measures of perceived trust in workplaces, in terms of either trust in management or trust among co-workers. We use these trust measures as a proxy for workplace social capital, which we view as part of job amenities. We hypothesize that there exists a market in which workers trade-off between trust and wages. The market, however, can be inefficient due to lack of information and the costs of searching for and changing jobs. The estimated compensating differentials can provide an implicit estimate of such costs. So far as we know, ours are the first estimates of compensating differentials for workplace trust. The concept of compensating differentials provides, we think, the best way of framing and presenting our workplace results.

And analyzing the other important job satisfaction factors — salary, autonomy, etc. — and solving for trust, the researchers determined the economic value of trust is very high. How high? Quoting the authors, ‘a one-third-standard-deviation increase in trust in management is equivalent to an income increase of more than one-third.’ They also found that work place trust is the strongest determinant of workplace satisfaction, and is strongly linked to absenteeism, illness, and productivity.

Turning that around, workers would accept a third less pay in exchange for a management one-third more trustworthy.

Looking back at the Gallup data, Helliwell and Huang also found that women are more likely than men to make this economic tradeoff: they are more willing to accept a lower wage in exchange for a work environment higher in social capital. And to generalize that, it might be possible for companies to intentionally foster a trust-rich environment in order to increase productivity at lower cost:

Do our results for the value of workplace trust and other job characteristics really reflect compensating differentials in the usual sense, with employers who can offer better non-financial job characteristics being able to hire workers of given quality at lower wages? We think so. Our results suggest that a firm managing to provide better jobs (as measured by some package of the non-financial job characteristics connected to higher levels of life satisfaction) would be able to reap rewards in some combination of dimensions: lower quit rates, lower monitoring costs, easier (and hence less expensive) hiring, and more effective effort from employees at all wage levels.

So, a paradoxical answer to the implicit question of the costs of an engaged workforce: it may be cheaper to actively build a work environment with high social capital — high in trust — because people will be willing make an economic tradeoff, exchanging possible income and other benefits for higher job satisfaction.

Recall those ideas when you are reading the prattling of year-end prognosticators: there are some ideas that are timeless, and one is that trust trumps everything else at work, if we only have the eyes to see it.