Taming Workplace Stress •Why highly engaged employees are more likely to report manageable stress levels •How gaps in an organization’s employee value proposition affect workplace stress •What steps your organization can take to mitigate stress

Not only are employees with manageable stress levels engaged in the traditional sense of being committed to achieving work goals, but they are enabled with internal support and resources, and energized by an environment that promotes physical, emotional and social well-being. Seventyfour percent of highly engaged employees by this measure report that stress levels are manageable, versus 27% among the disengaged. These findings, which will be of interest to both business unit and HR leaders, suggest that interventions to improve the employee value proposition (EVP) and increase levels of sustainable engagement can help mitigate work-related stress.

Stress is pervasive in today’s always-on global work environment. Employees in all organizations report experiencing stress. While stress can be positive and energize workers to meet challenging goals, it can also overwhelm employees to the point that they feel detached and disengaged. According to the Towers Watson 2012 Global Workforce Study, almost four out of 10 respondents state they are often bothered by excessive pressure on the job. Yet some employers and employees continue to thrive and succeed in the face of workplace stress. Why? Our research points to a link between the ability to manage workplace stress and sustainable employee engagement.

Almost

4 10 out of

respondents state they are often bothered by excessive pressure on the job

Sustainable Engagement 1

2

3

Traditionally engaged

Enabled

• Belief in company goals and objectives • Emotional connection • Willingness to give extra effort

• Sustaining the energy • Free from obstacles • Social supports in the work • Available resources environment • Ability to meet work challenges • Sense of enthusiasm and effectively accomplishment

The Toll of Workplace Stress Only half of all 2012 Global Workforce Study respondents agree that workplace stress levels are manageable. Respondents in this study were grouped into six classes of employment (Figure 1), and at least 34% of each group report often being troubled by excessive pressure on the job, suggesting that the problem exists across all levels of the workforce. In order to sharpen our focus on the causes of workplace stress, it is helpful to identify and eliminate the factors that do not contribute to this condition. For example, the performance level of a company does not appear to be associated with greater levels of unmanageable stress, as 62% of employees who say they work for a high-performing company report manageable stress levels at work, versus 53% of employees overall. A majority of male and female employees were also likely to agree that the stress

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Energized

levels were manageable, as did at least half of all employees across tenure levels and compensation structures. Figure 1. Employees who report often being bothered by excessive pressure on the job

48% Mid-level manager .....................38% First-line supervisor ...................42% Professional/Non-manager .........34% Administrative/Clerical..............36% Laborer/Manual worker .............38% Senior manager/Executive.........

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Our report does point to a relationship between stress and employee engagement. Only 27% of disengaged employees say stress levels are usually manageable, compared to 74% of highly engaged employees who agree. And 45% of disengaged respondents say they are often bothered by excessive pressure on the job (Figure 2). Figure 2. Highly engaged employees report lower levels of unmanageable stress and less excessive pressure on the job

Disengaged employees:

45%

report excessive pressure on the job

vs.

Highly engaged employees:

34%

report excessive pressure on the job

The latest Global Workforce Study also suggests a link between stress and gaps in an organization’s EVP, which is the “give and the get” between company and worker encompassing every aspect of the employment experience, from the organization’s mission and values; to jobs, culture and colleagues; to the full portfolio of total rewards programs. Almost 40% of those who rate the effectiveness of their organization’s EVP as low say they are often bothered by excessive pressure on the job.

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A closer look at the employment deal reveals gaps in critical areas of the EVP that directly influence enablement and an energizing environment. To uncover these gaps, it can be helpful for organizations to answer the following questions: • Is my organization rewarding employees for healthy living? Only 15% of employees who gave their organization’s EVP a low effectiveness rating agree that their organization rewards healthy living. This finding suggests that organizations might be missing opportunities to engage employees, including high performers and the disengaged, through effective health-related rewards programs.

“Employers that ignore issues related to work/ life balance risk losing employees, including top performers and employees with critical skills, to competitors.” • Is my organization committed to work/life balance initiatives? Forty-eight percent of top performers and 45% of respondents globally agree that their organization makes it possible for employees to have a healthy work/life balance. Many employers acknowledge that employees face increasing demands. In the 2012 – 2013 Global Talent Management and Rewards Survey, more than half of employers report that their employees have been working more hours than normal for the past three years, and 43% expect this pace to continue for the next three years. Employers that ignore issues related to work/life balance risk losing employees, including top performers and employees with critical skills, to competitors.

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• Is my organization creating a clear path to success with resources and workforce support? When responding to the statement, “There are usually enough employees in my work group to get the job done right,” nearly three-quarters (74%) of the highly engaged agreed, as did 49% of employees globally, but only a mere 23% of the disengaged agreed. This finding suggests that the perception of inadequate staffing levels and overall workforce planning might have a greater negative impact on disengaged workers than on other groups, thereby posing a significant obstacle to sustainable engagement. • Do my employees understand the direction of the business and how they contribute to achieving business goals? When people feel overwhelmed and confused about their roles, they can experience job burnout. It’s not surprising that among disengaged employees, just 36% of the global sample report they understand business goals and only 38% indicate they understand how their job specifically

contributes to achieving those goals. The story is drastically different among the highly engaged, for whom these percentages more than doubled, with 86% reporting they understand business goals and 88% indicating they know how their jobs contribute to achieving those goals. Clearly, creating clarity about goals and performance expectations is a critical element in addressing the dilemma of workplace stress. Because gaps in employees’ understanding of goals might stem from various causes, identifying the reasons for these gaps is an essential first step in making sure resources are directed effectively. Once you understand the causes of these gaps, developing solutions becomes easier and will likely involve a combination of both enterprise actions and better local communication. Overall, these gaps are preventing companies from providing employees with the enablement and energizing environment critical to mitigating stress and building sustainable engagement.

Encouraging Findings for U.S. Organizations

The

impact

of

segmentation on your

EVP

Organizations that have segmented the workforce and deliver customized EVPs for critical employee segments are nearly twice as likely as companies with more tactical and less integrated EVPs to report financial performance substantially above their peer group. Source: 2012 – 2013 Global Talent Management and Rewards Study 

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The responses of employees in the U.S. reflect a more positive perception of EVP elements and less problematic stress than is the case for nonU.S. respondents. Only 30% of U.S. respondents report being bothered by excessive pressure on the job, versus 39% of respondents outside the U.S. Moreover, 40% of U.S. employees agree with the statement, “My employer rewards employees for living a healthy lifestyle or for taking steps to improve their health.” Yet only 32% of their peers outside the U.S. concur with this statement. Lastly, while 64% of respondents in the U.S. say their organization’s work arrangements are flexible enough to meet their needs, only 51% of non-U.S. respondents do so. These findings likely reflect the effectiveness of U.S. organizations’ investment in EVP initiatives in areas that promote a healthy, energizing work environment, and that provide the necessary organizational support and flexibility to maintain employee engagement, thereby reducing problematic stress.

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Mitigating Workplace Stress Successful organizations are proactive in addressing workplace stress before it negatively impacts employee productivity. The following are several proven practices for stress mitigation: • Differentiate your EVP for key segments. It is strategically important for employers to tailor their EVP to key segments — for example, critical-skill or high-potential employees. Segmentation enables organizations to better understand the needs and preferences of key employee groups based on a range of dimensions, including work responsibilities, life stages, demographics and psychographics. With this knowledge, employers can design EVP elements such as wellness rewards programs that will engage these key segments and mitigate problematic stress. For example, a software company could decide to provide stress management coaching to its software developers, a critical-skill segment. Manageable stress levels and workload along with a healthy work/life balance combine to form one of the top five drivers of sustainable engagement (Figure 3). • Provide flexible work arrangements. Initiatives that provide employees balance and flexibility in their work arrangements go a long way toward alleviating workplace stress. These can include telecommuting, job sharing and reduced hours or compressed work weeks. For instance, a company that offered job sharing reinforced this option in its communication to financial analysts who had shown a preference for this type of work arrangement. The issue of flexible work arrangements has recently come under increasing scrutiny. Companies contemplating curtailing flexible work arrangements should weigh the intended benefits of such a change against the possibility of a backlash — and the possible impact on employee engagement — among key talent segments. • Develop effective workforce planning. To avoid having an unusually heavy workload or lack of support overwhelm employees and erode performance, it is essential for employers to develop robust workforce planning practices and processes. Employers begin by assessing how well suited

Figure 3. Top drivers of sustainable engagement Sustainable engagement drivers Leadership

U.S.

Global

1

1

Stress, balance and workload

2

2

Goals and objectives

3

3

Supervision

4

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Image

5

5

employees’ skills and experience are to the required tasks, and by identifying potential skill and talent gaps. Companies should also review how work is dispersed across teams and individuals to ensure that skills match work needs. In lean times when hiring budgets are likely to be strained, organizations could opt to develop or expand the skills and capabilities of current employees instead of recruiting new hires. Take the case of a food manufacturer that was planning on expanding its presence on social networks as part of a new product launch. This player found it cost effective and efficient to upgrade the skills of a group of highly motivated marketing managers so that the marketing group would not become overwhelmed by the demands of planning and implementing social media campaigns. This approach gave these managers the opportunity to acquire new skills, while at the same time allowing the company to meet its need for social media communication without increasing its head count. • Support a company-wide culture of health through integrated health, wellness and wellbeing programs and resources. Perceptions of an organization’s EVP are directly influenced by employees’ belief that their organization cares about their well-being and rewards healthy living and lifestyles. A high-tech company that aspired to develop a culture of health and well-being used microsegmentation — an advanced form of segmentation that integrates a wide range of dimensions including lifestyles and psychographics — to better understand its employees. It divided its workforce into 11 life-stage groups based on health issues, behaviors, consumption patterns

“Perceptions of an organization’s EVP are directly influenced by employees’ belief that their organization cares about their wellbeing and rewards healthy living and lifestyles.”

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and demographics, among other dimensions. The company discovered that employees in its call center in the eastern U.S. faced serious health risks, and that their attitudes and lifestyles were very different from those of the employees in its call center in the western part of the country. The company used two different health management outreach approaches to engage its two distinct call center segments. The data revealed that the eastern U.S. call center employees were more likely to exercise at home or with their peers than at a gym. And so, while the company paid gym membership fees for employees in the western call center, it developed a program for its call center workers in the East to encourage activities that could be completed as a family or in groups — such as bowling. The program encouraged employees to start with small, manageable steps toward better health, and it celebrated successes. This company learned that to build a culture of health, it is necessary to develop solutions aligned with employees’ preferences and lifestyles. It’s essential for organizations and their leaders to understand what matters to employees, and why and how these factors affect productivity and behavior on the job. To reap the rewards of an engaged workforce and greater productivity, organizations need to dig deeply to understand the most pressing pain points

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 14,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, and risk and capital management.

Copyright © 2013 Towers Watson. All rights reserved. NA-2013-30593

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hindering sustainable engagement, which may include unmanageable workplace stress. By developing meaningful actions grounded in an improved and highly relevant EVP, organizations can make significant strides toward creating a healthy and productive work environment.

Start Taming Workplace Stress Now Take a deep dive into understanding what employees want and need. Determine how workplace stress might be impeding overall business performance as well as critical workforce segments. Research and explore best practices for integrated health, wellness and well-being programs. Take a closer look at your EVP, and assess current workplace programs — are your programs relevant to critical workforce segments, and are they being communicated effectively?