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Employee Engagement Staggers in Workplace

The economy may be slowly bouncing back, but employee engagement and morale in the workplace are not.

Almost half of organizations worldwide saw a significant drop in employee engagement levels at the end of the June 2010 quarter, according a report by Hewitt Associates, a global human resources consulting and outsourcing company. This was the largest decline Hewitt observed since it began conducting employee engagement research 15 years ago.

The findings highlight a growing tension between employers—many of which are struggling to stabilize their financial situation—and employees, who are showing fatigue in response to a lengthy period of stress, uncertainty and confusion brought about by the recession and their company's actions.

The report also suggests a link between employee engagement levels and financial performance. Organizations with high levels of engagement (where 65 percent or more of employees are engaged) outperformed the total stock market index even in volatile economic conditions.

Meanwhile, companies with low engagement (where less than 40 percent of employees are engaged) had a total shareholder return that was 44 percent lower than the average.

“Organizations are struggling to improve employee engagement, but they need to stay focused,” Ted Marusarz, leader of Global Engagement and Culture at Hewitt, said in a statement. “The extra effort companies put forth now will make a difference in how successful they are at boosting employee morale and retaining top talent as the economy stabilizes and employee opportunities open up.”