Global Workforce Study

At a Glance

Overview cited by employees and employers are largely the

same, although job security ranks higher among
The 2014 Global Workforce Study provides a detailed employees’ key reasons to join a company, and an
view into the attitudes and concerns of workers around organization’s mission/vision/values does not appear
the globe. This year’s study includes over 32,000 on the employee list.
participants and is part of a larger research initiative
designed to capture both employee and employer
“Job security is a key reason
perspectives on the emerging trends and issues shaping
the global workplace. This approach enables us to
to join an organization.”

41% 26%
integrate insights from our 2014 employer research
into the discussion of findings from our employee study,
resulting in a richer, more nuanced picture of today’s of employees of employers
complex workplace challenges. say so say so
Labor activity has picked up since the last Global
Workforce Study in 2012. With nearly half (48%) of
employers in the 2014 Global Talent Management and The last driver highlights a distinct difference between
Rewards Study reporting an increase in hiring compared employer and employee views. Employees cite paid
to last year and more than one-third (35%) indicating vacation time as a key attraction driver, reflecting
that turnover rose during the same period, it is critical to the importance they place on work/life balance and
develop a clear perspective on what it takes to attract, the need to unplug from today’s 24/7, always-on
retain and engage workers. workplace. Paid vacation time is noticeably absent
from the employers’ view of key attraction drivers.
There’s No Escaping the Fundamentals
Employee responses reflect a more fluid labor market as Figure 1. Top attraction drivers — Employer versus employee view
well, with just over a quarter (26%) saying they are likely Employer view — Employee view —
to leave their employer within the next two years. Our Talent Management and Global Workforce Study
findings highlight the attraction and retention challenges Rewards Study
facing employers. Fewer than half of employees think 1 Career advancement opportunities Base pay/Salary
their organization does a good job of hiring (46%) and 2 Base pay/Salary Job security
retaining (42%) highly qualified employees. 3 Challenging work Career advancement opportunities
What does it take to get and keep talent in 2014? 4 Organization’s reputation as good employer Learning and development opportunities
The fundamentals — base pay, job security and 5 Organization’s mission/vision/values Challenging work
career advancement opportunities — matter most 6 Learning and development opportunities Organization’s reputation as good employer
to employees globally when deciding to join or leave 7 Job security Vacation/Paid time off
an organization (Figure 1). Employers generally
understand these priorities. The attraction drivers
In assessing key retention drivers, workers and By underestimating the value employees place on these
employers alike agree on the importance of base pay three issues, organizations risk losing key talent.
and opportunities to advance (Figure 2). However, a
Contrary to popular assumption, our survey also
disconnect between employee and employer views on
reveals that demographics do not have a strong impact
retention emerges in a number of other areas. Three
on drivers of attraction and retention. Five of the
key drivers cited by employees don’t even appear on
seven top drivers of attraction are the same for all age
the employers’ list of factors influencing retention.
groups, six out of seven for retention (see sidebar).
•• Trust/confidence in senior leadership. For
employees to remain with an organization, they Figure 2. Top retention drivers — Employer versus employee view
must have confidence in the ability of their top
Employer view — Employee view —
leaders to motivate and guide them in today’s Talent Management and Global Workforce Study
dynamic business environment. Yet organizations Rewards Study
underestimate the role of senior leaders in helping 1 Base pay/Salary Base pay/Salary
to retain employees. From their perspective, a
2 Career advancement opportunities Career advancement opportunities
worker’s relationship with their supervisor is more
3 Relationship with supervisor/manager Trust/Confidence in senior leadership
critical to retention.
•• Job security. This issue remains top of mind for 4 Manage/Limit work-related stress Job security
employees and plays a critical role not only in 5 Learning and development opportunities Length of commute
attracting employees but also in retaining them. 6 Short-term incentives Relationship with supervisor/manager
•• Length of commute. As employees strive to improve 7 Challenging work Manage/Limit work-related stress
their work/life balance, the length of their commute
becomes a key consideration in deciding whether to
remain with their current employer.

Demographic Myths Busted

Regardless of employee age, base pay is the most frequently cited reason to join or leave an organization. Job security is the second-
most frequently selected driver of attraction across all key age groups, including those under 30, and it is a key retention driver among all
employees over 40. Career advancement opportunities ranks among the top five drivers of employee attraction across all age groups and
among the top three drivers of retention regardless of age. In deciding whether to remain with their current employer, employees in all
age groups place a premium on having trust and confidence in senior leadership.

Top attraction and retention drivers by age

< 30 30 – 39 40 – 49 50+
1 Base pay/Salary Base pay/Salary Base pay/Salary Base pay/Salary

Job security Job security Job security Job security

2 Career advancement Career advancement Career advancement Trust/Confidence in
opportunities opportunities opportunities senior leadership
Career advancement Career advancement Career advancement
Challenging work
opportunities opportunities opportunities
3 Trust/Confidence in Trust/Confidence in Career advancement
Length of commute
senior leadership senior leadership opportunities
Learning and development Learning and development Organization’s reputation Organization’s reputation

opportunities opportunities as good employer as good employer
4 Manage/Limit work-related Relationship with
Job security Job security
stress supervisor/manager
Organization’s reputation Career advancement
5 Challenging work Challenging work
as good employer opportunities
Trust/Confidence in senior Length of commute Relationship with Relationship with
leadership supervisor/manager supervisor/manager

Attraction driver Retention driver

towerswatson.com 2014 Global Workforce Study — At a Glance 2

Engagement in Jeopardy — Figure 3. Global engagement segments
Leaders Wanted
Towers Watson research has shown that there are
three measurable elements essential to sustainable Highly engaged: Employees
engagement:
24%
Disengaged
who scored high on all
three elements of
•• Traditional engagement — employees’ willingness sustainable engagement
to expend discretionary effort on their job

40%
Unsupported: Employees
•• Enablement — having the tools, resources and
who are traditionally
support (typically through direct-line supervisors)
engaged but lack the

17%
Highly engaged
to do their job effectively enablement and/or energy
•• Energy — having a work environment that actively for sustainable engagement
Detached
supports physical, emotional and interpersonal
Detached: Employees who
well-being
feel supported and/or

19%
Based on employee responses to questions pertaining energized but lack a sense
to each element, we have identified four distinct of traditional engagement
engagement segments globally (Figure 3). Unsupported
Disengaged: Employees
with less favorable scores
Four in 10 employees are highly engaged, so there is
for all three aspects of
room for improvement. Our findings show that close to
sustainable engagement
a quarter (24%) are disengaged, and another 36% can
be described as either unsupported or detached. A full
60% of employees lack the elements required to be
highly engaged.

Given the low levels of highly engaged workers, it is “In

“ today’s global workplace, leadership is a driver
essential for companies to understand the factors that
drive sustainable engagement. First among these is of not only sustainable engagement overall, as
leadership, long recognized as essential to traditional
engagement. In today’s global workplace, leadership
revealed in our 2012 research, but also all the
is a driver of not only sustainable engagement overall, components of sustainable engagement.”
as revealed in our 2012 research, but also all the
components of sustainable engagement (Figure 4). When neither managers nor leaders are perceived as
effective, only 8% of employees are highly engaged.
Effective leaders and managers influence sustainable
Not unexpectedly, in companies where both leaders
engagement. In organizations where employees perceive
and managers are perceived by employees as effective,
their managers (but not their leaders) to be effective,
72% of employees are highly engaged. Companies with
23% of workers are highly engaged. And in organizations
effective leaders as well as managers can expect to have
where leaders (but not managers) are perceived as
more highly engaged employees.
effective, 35% of employees are highly engaged.

Figure 4. Global top drivers of sustainable engagement

Sustainable engagement Engagement Energy Enablement

1 Leadership Leadership Leadership Leadership
2 Goals and objectives Image Goals and objectives Workload and
work/life balance
3 Workload and Goals and objectives Workload and Empowerment
work/life balance work/life balance
4 Image Workload and Supervision Goals and objectives
work/life balance
5 Empowerment Communications Image Supervision

towerswatson.com 2014 Global Workforce Study — At a Glance 3

Figure 5. Towers Watson leadership effectiveness model

Business strategy
Culture and values

Envision tes, values and Inspire

ribu exp
l att e
● Global perspective na tion com Buil rie ● Assertiveness and courage
so irec orities mu din n
● Knowing the business d ri ni g ca u ● Company ambassadorship

ce ency h influ
andeterm Per
p

rif ng
g

s
● Planning and organizing ● Influence and persuasion

rg wit
Ins

tin
cla ini n
yin sio

g
● Prioritization p ● Inspiring and motivating others

and ence
vi

ire
● Strategic visioning En ● Sociopolitical savvy
D

● Vaulting ● Stakeholder management

Leader
effectiveness
Adapt Transform

s
Ad

lt
Ma d sh

or

gr e
an

esu
Adaptability Change leadership

in n g
●
t ●
ap
na ap

sf
n

er ch a
Tr a
gin in

● Cross-cultural sensitivity ● Creativity and innovation

e n
g

g
● Interpersonal sensitivity g mo i vi v ● Decision making
b e tio
ha ns D r d eli
vio r d
● Learning orientation an ● Networking/Relationship

● Resiliency management
● Self-awareness ● Results orientation

● Technology savvy
Engaged
aged employ
employees
Business results

What Do Effective Leaders Do Differently? an understanding of key success factors. Slightly over
60% of employees indicate that their leaders perform
Only 48% of employees report that their top effectively on these aspects of envisioning.
management is doing a good job of providing
effective leadership. The Towers Watson leadership A leadership model incorporating these performance
effectiveness model provides a framework that dimensions and helping leaders develop these
helps us clarify the performance components of competencies can improve the effectiveness of
effective leaders (Figure 5). First, effective leaders are leaders and as a result, increase retention rates and
committed to an organization’s strategic priorities and levels of sustainable engagement.
model its values and culture. They also perform across
four key dimensions and associated competencies: Figure 6. Key drivers of leadership effectiveness
envisioning the future, inspiring others to follow, 0% 20% 40% 60% 80%
transforming the organization to achieve the vision,
and adapting to changing internal and external 1. Leaders in this company inspire employees to give their best
55
conditions. These dimensions are helpful in analyzing
employee views on senior leadership and drivers of 2. Company leaders consistently make rational, data-driven decisions that benefit
leadership effectiveness captured in our study. the organization in the long term
58
From the employee perspective, the ability to inspire
3. Company leaders communicate a clear and compelling vision for the future
and motivate employees is the most important driver
61
of leadership effectiveness (Figure 6). Yet only slightly
more than half (55%) of employees say their leaders 4. Senior leaders are very flexible in their approach to new situations
51
inspire them. Similarly, employees value a leader’s
ability to adapt, which may involve responding to new 5. Senior management strongly believes that respecting individual and cultural differences
situations, different social and cultural contexts as is important for our success
61
well as growth opportunities. There is some room
for improvement here, too. For example, only 51% of 6. Company leaders truly understand the factors that drive business success
employees report that their senior leaders are very 62
flexible in their approach to new situations. Also key 7. Senior leaders seek out feedback to identify opportunities to learn and grow
to effective leadership is envisioning, which includes 55
clearly communicating future plans and demonstrating
Percentage of employee favorability

towerswatson.com 2014 Global Workforce Study — At a Glance 4

What Does an Effective Manager
Look Like?
“Managers
“ play a particularly important role
Our findings reinforce the value of effective managers,
when leadership from the top of the organization
revealing that supervision is a key driver of the energy is lacking.”
and enablement required to reach the highest levels of
sustainable engagement. Moreover, 30% of employees
report a lack of supervisor support (i.e., a lack of Figure 7. Key drivers of manager effectiveness
recognition and feedback, and managers not living up 0% 20% 40% 60% 80%
to their word) as a cause of work-related stress.
1. Manager does what he/she says
From the employee perspective, the principal driver of 57
manager effectiveness is consistency between words 2. Manager helps remove obstacles
and actions — the ability to walk the talk (Figure 7). 54
In addition, an effective manager removes obstacles 3. Manager differentiates between high and low performers
to success, differentiates between high and low 54
performers, and at the same time, treats all workers 4. Manager treats employees with respect
with respect and clearly communicates goals. While 70
70% of employees report that their immediate manager
5. Manager clearly communicates goals/assignments
treats them with respect, there is some room for
57
improvement in the other areas that drive manager
effectiveness. Slightly more than half of employees say Percentage of employee favorability
their immediate supervisor acts in a manner consistent
with these key drivers.
Managers play a particularly important role when An organization’s employment deal is the foundation of
leadership from the top of the organization is lacking. the experience it offers to employees. The employment
In fact, the aspects of manager behavior driving overall deal defines the give and the get between the
effectiveness change when senior leaders are viewed organization and its employees. Employee responses
as not effective. Specifically, it becomes critical for indicate that organizations have made modest progress
a manager to encourage new ideas and new ways in several areas related to the employment deal since
of working, suggesting that the supervisor becomes our last survey (Figure 8), but there is still much room
responsible for promoting innovation in the absence of for improvement.
effective senior leadership. Employees who feel their organization is effective in
To improve manager performance and drive sustainable these areas are significantly more likely to be highly
engagement, organizations can start by defining engaged than those who do not.
competencies for their managers based on the drivers
of manager effectiveness revealed in our study.
Figure 8. Progress in formalizing and living up to the employment deal
Expecting a Consumer-Like Experience Percentage of employee favorability
0% 10% 20% 30% 40% 50%
After decades of emphasizing employees’
responsibility to know the customers’ needs and Organization has a formal employment deal
meet them, many employees are starting to expect 47
the same from their employer. Seventy percent of 42
employees agree that their organization should Organization’s employment deal is aligned with external values
understand employees to the same degree that 47
employees are expected to understand customers. 40
However, fewer than half (43%) report having an
Organization lives up to its employment deal
employer that understands them in this way.
45
39

2014 2012

towerswatson.com 2014 Global Workforce Study — At a Glance 5

 Participating markets
Key Takeaways From the 2014 Global Workforce Study for the study
Australia
•• Base salary, opportunities for career advancement •• It is critical for employers to prioritize the Belgium
and job security are fundamental to attracting development of senior leaders whom employees Brazil
and retaining all employees. Therefore, it is can trust to lead them to success in order Canada
China
essential to be competitive in these areas. to motivate workers to remain with their France
Even though companies cannot guarantee job organization. They can start by developing a Germany
security, they can focus on creating a stable work leadership model that incorporates performance Hong Kong
environment through communication of business components aligned with their strategic priorities, India
strategy, goals and results as well as effective values and culture. Indonesia
Ireland
leaders and managers, and clear expectations. •• To improve manager effectiveness, companies Italy
•• Given that employees cite paid vacation time as should focus on the competencies that Japan
a key attraction driver and length of commute as employees value in their managers: being Korea
a key retention driver, employers should seek to consistent in words and actions, helping remove Malaysia
provide their workforce with competitive work/life obstacles, and differentiating between high and Mexico
Netherlands
balance programs. low performers. Philippines
•• Employers looking to increase engagement levels Singapore
can start by offering employees a consumer-like Spain
experience. Switzerland
Taiwan
Turkey
U.A.E.
U.K.
About the Study The Towers Watson Global Talent Management and U.S.
Rewards Study was conducted from April to June 2014
The Towers Watson Global Workforce Study covers in 31 markets around the world and includes responses
more than 32,000 employees selected from research from 1,637 organizations. The participants represent a
panels that represent the populations of full-time wide range of industries and geographic regions.
employees working in large and midsize organizations
across a range of industries in 26 markets around For more information, please visit:
the world. It was fielded online during April and May http://www.towerswatson.com/en/Insights/IC-Types/
2014. The study is designed to help companies better Survey-Research-Results/2014/07/balancing-
understand their diverse employee segments and the employer-and-employee-priorities
factors that influence employee performance on the
job by gauging changing attitudes that affect attraction,
retention, engagement and productivity.

About Towers Watson

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

Copyright © 2014 Towers Watson. All rights reserved.

TW-NA-2014-38306

towerswatson.com

/company/towerswatson @towerswatson /towerswatson