Brian Kropp: Employee behaviour influenced by Brexit disruption

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Employee behaviour influenced by Brexit disruption

While an unstable government continues to “throw the dice” on its potential next steps – with continuing delays – it is no wonder that businesses have felt forced to accelerate their Brexit planning. However, within such plans, employers are failing to predict how their workforce will respond to disruption. Many employers operate believing that their employees will loyally knuckle down during times of strife, in order to protect the business and their jobs. Far from it, however.

One of the most profound effects of the Brexit process has been social division. The incredibly narrow margin by which the referendum vote was settled, coupled with a protracted process of pre-vote campaigning and post-vote negotiations, has created a polarised social climate, wherein groups on each side of the debate appear firmly entrenched.

Against this backdrop, emotions are understandably running high. This can lead to intense, or even extreme, emotional reactions from employees. Such reactions can range from bullying and intimidation in response to the way another employee voted, to the increased voicing of discriminatory opinions, fuelled in part by divisive public debates on key issues such as migration or nationhood. Ultimately, a wider lack of social cohesion does not stop at the door to the workplace: if potent enough, it will always “carry through” into an employee’s approach to work.

According to a Gartner poll of employees ahead of Brexit, the average employee spends 58 minutes of their workday worrying about how Brexit will affect them, their families, and their friends. This accounts for 12 per cent of their working day, and – in an organisation of 10,000 employees – nearly 50,000 hours of productivity lost to distraction per week.

In fact, according to historical analysis from Gartner, such behaviours regularly flare up during times of business disruption. Employees feel anxious, frustrated and are burnt out . Indeed, in the aftermath of Brexit, we predict that the following trends are likely to re-emerge:

  1. Employee engagement will decline
  2. High-potential employees will become much more likely to quit
  3. Employees’ need for recognition will increase
  4. Employees will be more likely to lie, cheat, and even steal

 

Engagement declines

One of the clearest reasons why a drop in employee engagement occurs during times of disruption is that workers become more risk adverse. Unwilling to try new things – and even less willing to risk losing their jobs by sticking their necks on the line for the sake of innovation, or for a ground-breaking piece of work – employees understandably become cautious and more risk-adverse. While executives want to believe that during periods of disruption their employees will “lean in” and help their business push through, the reality is that employees “lean out.” In order to course correct during this time, managers should look to coax employees out of their proclivity to “lean out,” by providing guidelines for new business solutions. HR functions should in turn aid this softer approach by guiding managers to stimulate innovation, while minimising business risk. Above all, this task requires constant lines of communication between management and employees. During a period of disruption – perhaps, in this case, Brexit political uncertainty – it is vital that business leaders remain communicative, leaving employees with confidence that their interests are being defended.

Valued employees will look to quit

Facing uncertain economic straits, most organisations naturally ask more of their most trusted, high-potential employees, to ensure the best work is safely handled. Unfortunately, this increased workload often goes unrewarded. While executives are occupied by the need to mitigate external pressures, the engagement levels of these high-value employees never recover. As such, one in four high potentials will leave their employer during periods of major disruption. This stark finding is supported by current data showing that, globally, workers are becoming less intent on staying in their current positions.

Research from Gartner in 2018 showed a decline globally in employees’ intent to stay in their current positions (only 53 percent of workers in Q3 compared to 60 percent of workers in Q1). This marked the fifth consecutive quarter that intent to stay had declined globally. In order to mitigate the risks of a high-potential exodus, employers and HR leaders should focus on redefining their strategies to engage and retain employees. It is vital that organisations do not lose sight of the drivers most commonly influencing employment value propositions (EVP): work-life balance, future career opportunity, and compensation. Ultimately, the departure of high-potentials evidences a failure on the behalf of employers to provide what current – and future – employees value most.

Recognition needs to increase

During tough socio-economic times, employees increasingly seek job recognition to affirm their place in the organisation – an emotional response of “professional self-preservation.” Following the financial crisis of 2008, employees’ need for recognition increased considerably as they grew anxious about their job security in a disrupted economy. Between October 2008 and March 2009, the percentage of employees citing “managers recognising performance” as one of their top five most important employment value proposition (EVP) attributes rose by 15 per cent. At the same time, however – squeezed by intense financial pressure and expectation to streamline budgets – 81 per cent of organisations reduced their compensation-based recognition in 2009. Clearly, the needs of businesses and the needs of their employees were dreadfully misaligned. As a result, business leaders were guiding their employment value proposition away from employee needs – weakening their employer brand, diluting their competitive hiring edge and, ultimately, creating more problems for business recovery later down the line.

Amid weakened exchange rates and trade uncertainty, UK businesses are sure to experience the same financial pressures of business disruption once again. However, if organisations decide they must reduce compensation-based recognition, this can be offset by implementing processes of “differentiated recognition” instead. Such strategies involve differentiating levels of employee contribution accurately and equitably: if done well, these schemes can operate at a lower cost level, while still championing the work of the organisation’s highest performers, and boosting discretionary effort across the board. However, while research shows that differentiated strategies produce far better results than those recognising all employees equally, few managers pull them off well. In fact, only 11 per cent of employees agreed that their manager differentiated recognition accurately; instead, a striking 44 per cent of employees disagreed that their managers had this quality. Moving forward through times of disruption, HR leaders must ensure they place renewed focus on tailoring high-performance rewards and recognition.

Employees are likely to lie, cheat, and steal

Shockingly, one of the most prevalent (and underestimated) responses during periods of significant business disruption is the increased likelihood of employees to lie, cheat and steal. Indeed, analysis from Gartner shows that these types of behaviour increase by up to 33 per cent during times of major disruption. Such spikes in negative behaviour have been witnessed before: during the global financial crisis, observed employee misconduct rose by a third, between the first and third quarters of 2008. This behaviour can range from employees stealing merchandise, to submitting false expense reports, trading inside information, and faking injuries. From a human resources perspective, this trend proves worrying not only for the community of the workplace, but because it also shows a deterioration of organisational values and ethics.

To counteract this rise in misconduct, managers must do more to demonstrate and communicate their organisation’s values and ethics on a personal, “lived” basis. It is vital that managers work with their partners in HR to embrace role-modelling behaviours, such as highlighting ethical best-practices, communicating values, identifying potential areas for misconduct, or monitoring external employee communications. Correcting behaviour in the moment can also be powerful in practice – although managers must be especially cautious that this is done in direct cooperation with the organisation’s HR function, so as to determine the appropriate solution for a particular issue.

Mitigating disruption through high-velocity decision-making

When Gartner recently interviewed one UK-based banker, for their thoughts on Brexit preparation, they stated that such preparation was, “No different from the daily analysis we do on our portfolios anyway.” Fundamentally, this is a best-practice representation of how organisations should prepare themselves for the periods of potentially massive disruption ahead. Business leaders must build and integrate processes into their day-to-day business operations, which enable the monitoring of disruption, and its impacts. At a base-level, this means proactive engagement with all business functions – including enterprise architects, HR pioneers, and IT leaders – to create a “management command center”, of sorts, to quickly address the changing concerns of an unsettled workforce.

 

Interested in managing employees in time of crisis? We recommend the Re-engineering Performance Management training day.

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About Brian Kropp

Brian Kropp, group vice president, Gartner’s HR Practice, oversees the research, tools, services and support that we provide to HR leaders and their teams.

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