For the first time in a decade, Hewitt's global research shows the number of organisations with decreasing employee engagement exceeds those with increasing engagement.
"We see in the 'stay scores', significant decline for some organisations at the moment, so it wouldn't take much for people to go," says Hewitt's Australia and New Zealand head of HR excellence, leadership and talent management practices, Jason White.
"And this declining engagement, combined with the skills shortages stuff that you're seeing in the press, is a volatile recipe for high-potential talent movement."
White says the low scores reflect the mistakes many organisations made during the economic downturn. "Individuals have seen colleagues disappear, they've seen career pathways move, and they have a real disaffection towards the organisation simply because it's promised one thing and delivered another," he says.
"If you look at what has driven engagement down, it's: the promise was broken, the change was managed really poorly [and] the leadership team's disengaged."
White says the sense that "the employment promise of a deal has been broken" is a "common theme" in Hewitt's January-March research. Employee comments express the view that the rhetoric around culture, values, leadership, and behaviour was "basically trodden on" during the GFC, he explains.
And instead of pursuing "a collaborative approach" to structural change, where employees were consulted and involved in the redesign of work, employers inflicted it on them with little or no consultation.
"Certainly if somebody's coming in to restructure your business you'd like to know more than just the date that you'll be told what the new structure looks like. But that's what some people experienced," he says.
A cascading effect
"The other factors driving engagement down are that senior leaders and managers themselves are less engaged now than they were pre-GFC," White says.
"For a top team of 15 to 20 (the extended executive group) to have one third of that group not engaged... then the people reporting to them are far less likely to be engaged, and then you have a cascading effect through the business.
"What that's led to - and you see this again in the language - is a failure to support strategic initiatives to drive alignment in the business."
What are the "best" employers doing?
"When you look at the best employers and their value propositions, they're extremely focused on the things that they can absolutely guarantee that they can deliver. So they avoid the bells and whistles and trying to oversell the deal," White says.
Their value propositions are a "two-way deal" - they are "extremely clear about what people can expect as part of the experience, and what the organisation expects of them", he says.
Top companies are also communicating with "absolute clarity" what they are trying to achieve in terms of engagement, White says. "So they actually have a strategy. It may not be termed an 'engagement strategy' but there is certainly a very clear aspiration, a set of objectives, and signals of success are clearly defined."
In addition, the implications of all new interventions and initiatives are evaluated to determine their potential impact on engagement, which is itself viewed as "a source of competitive advantage".
At present, the best employers are moving away from a "manufactured model leader who's been sheep-dipped in every leadership competency program going," White says. "And if there are certain leader behaviours that need development then fine, you bring in the required interventions to help people improve, but not these generic off-the-shelf dictionaries on how to be a great leader."
Instead, the emphasis is on demonstrating effective leadership behaviour "out amongst the workforce", showing transparency, and applying discretionary effort.
"When we look at our data from best employers there are a couple of basic questions around 'my manager gives me regular feedback on how I'm doing', 'I have had a career conversation with my manager', [and] 'I have a development plan'."
These conversations and processes "generally rely on discretionary effort", White says, which is why having engaged managers is so important.
"In most engagement surveys that we do, only one in two people responds positively to those questions. With the best employers, it's [more] like four out of five who say yes. So there's this notion about doing the basic stuff exceptionally well," he says.
