UK employees remain positive despite a looming recession and increased cost of living. This is the main finding from research conducted by YouGov and commissioned by Lattice. The survey asked 1,000 UK employees several questions about what is happening within their organisation, how optimistic they are about the future and their performance. Positive employees are more likely to engage in discretionary effort, and the research findings are good news for employers.
However, caution is advised as the economic outlook can change quickly, and the wrong decisions by firms can lead employees to become disillusioned. With the Bank of England raising interest rates again this week, some home-owning employees’ pockets will be hit as mortgages rise. It was, therefore, interesting to note that 79% of respondents saw incentives on performance have a positive impact. Lattice did not dive into the question of what incentives, but pay will likely become more important as inflation bites, despite the recent trend towards flexibility and wellbeing initiatives having higher prominence.
What is happening in businesses?
Every dark cloud
The most interesting findings from the survey come from the question that asked what changes have been communicated around business growth and goals in the past 6 months. Despite 77% being either very, or somewhat, optimistic about their company’s future, not every communication is positive.
- 11% were told of budget cuts
- 16% saw hiring freezes or slowdown
- 13% were told of redundancies
- 6% faced a reduction in benefits, and 2% saw a reduction in salaries
In addition to the above, 9% have seen a reduction in the company’s physical presence, such as office closures. However, this may indicate a transition to flexible working, natural consolidation rather than existing markets. The data shared with Enterprise Times did not show how much these potentially negative communications overlapped.
Has a silver lining
There was potentially positive news, though, to justify the optimism. 25% of respondents have seen an increased focus on performance and productivity. 17% have seen an adjustment to business growth goals. The research does not indicate whether these are up or down. However, if they have increased, that could mean the business is looking to expand. If down, it shows an understanding of tougher conditions and potentially less employee stress as they might have struggled to achieve the impossible.
Lattice did analyse the data deeply and found that layoffs and budget cuts contribute to a concerned outlook about the company. 32% of those facing cuts were not optimistic, compared to the average of 17% for all respondents.
Jack Altman, CEO at Lattice, commented, “There’s no doubt that current market and economic conditions are forcing many businesses to refocus on productivity, performance, efficiency, and cost-savings. When the survival of your business could be on the line, leaders are naturally going to push harder for top-level performance from employees that are going to drive the best results.”
Do Performance and Optimism go hand in hand?
Not only is optimism high, but employees also feel they are performing well. 83% of respondents feel that they are performing well at work, and 27% rate it as extremely good. Despite these high self-appraisal marks, 79% feel they could give more and improve performance and productivity. They just need a carrot, and incentives to do so. 79% believe the right incentives would increase productivity and performance at work. Even with those who rate their performance as extremely good, there is room for improvement, with more incentives for 77% of them (20.79% of all respondents).
The unanswered question is what incentives. Lattice argues that this justifies their conclusion that discretionary work is a huge untapped potential. However, the costs of such incentives are not factored in, and there is no data available to share the nature of the incentives. Many employees would work harder for a bigger salary, which is not discretionary and may not add value to the business.
Altman remains optimistic, explaining, “The myth of ‘people versus profit’ can be dangerous in times like this. Instead, we need a new paradigm that’s not focused on trade-offs but on winning together. Ultimately, it’s your people who will determine whether you sink or swim in tough times. Focusing your efforts on creating an engaged, motivated, and aligned workforce will help you unlock that huge untapped well of discretionary effort we’re seeing in our research.”
Enterprise Times; What does this mean
The key outtake from this small but intriguing survey is that incentives work. While this research does not dive into what incentives will increase productivity and performance, other research has. While bonuses and financial incentives can increase productivity, they are not the only incentives organisations should consider. Not every incentive is expensive, either. Organisations should consider recognition, engagement, and transparency as three ways to unlock discretionary effort. Training and career path advice and opportunities can also help.
Only 2% of respondents strongly disagreed that incentives increased performance. One is left with the question, why? Were these people close to retirement, leaving the company already or what? The downside to a quantitative survey is that the real answers are unavailable. What it does do is highlight that companies can take action, and solutions such as Lattice can help provide the answers. More research is needed within each organisation to find out what, though. Perhaps employee engagement software is the first step?
