An Overview of the State of Engagement in 2022
Ross Brooks: Welcome to Workday Podcast. With the help of organizational psychologists, data scientists, and other special guests, we'll be exploring the latest insights from our database of over 200 million employee survey responses. You'll also learn about the theory behind employee engagement and real-world strategies that you can use to improve the employee experience within your own organization. Today I'm talking with Dr. George Margrove, senior principal psychologist for Workday Peakon Employee Voice. George and I are going to discuss some of the key findings from our recently released state of engagement report. The report is based on an analysis and employee data submitted by nearly 2.5 million employees across 1,500 companies throughout 2021. We'll be looking at how the events of 2021 impacted engagement scores across different industries, including pharmaceuticals, healthcare, transportation, and many more. We'll also be taking a deep dive into various aspects of the employee experience that organizations will need to focus on for the remainder of 2022.
Brooks: George, welcome to the show. Great to have you here.
Dr. George Margrove: Thank you very much for having me, nice to be here.
Brooks: No problem at all. Before we get started, would you mind telling us a bit about yourself and what you do at Workday?
Margrove: Yes, certainly. I'm a senior principal psychologist so I work within the product team. And my role really is to support quite a few different aspects of things like product development and design, sales support, from a scientific psychology point of view. I do a lot of work on research and development and using the science and psychology that goes behind the products, which hopefully I'll be able to use today on the podcast.
Brooks: Amazing. Looking forward to it. So today we're gonna be talking about the State of Engagement Report, which looks at how employee engagement scores changed throughout 2021 across different industries. You've already had a look at the report, so my first question would be, were there any changes that stood out to you more than others when you first looked at the report?
Margrove: Yes, there were really a number of pretty fascinating trends that took place across the data from the period that we're looking at. Firstly, the overall changes across industry for overall engagement are very interesting. So if we look at the 17 industries that are represented, there have been some really big shifts over the past 12 months, you know, from that period deep in the pandemic to the later period just starting to emerge from the pandemic. And this shift has had really differential impacts across the different industries, in some ways which you might think are predictable, and some ways that are pretty unpredictable. So if we look at the overall trend, there's a couple of really big movers where we've seen a drop, which are pharmaceuticals, biotechnology, and life sciences as one sector, healthcare is another, and transportation as another.
Looking at pharmaceuticals, biotechnology, and life sciences, we can see the largest overall ranking drop across all the industries. This sector went from first place in Q1 to sixth place in Q3. And this was the largest drop in overall engagement down 0.23 points, which is quite significant. Also if we look at healthcare which is working in sort of a similar space, we can see there's a 4 point drop in ranking, and in fact, it declined 0.16 and that goes from fourth place to eighth place. And, you know, again, quite a large decline of 0.16. If we think about why this may have happened, clearly both of these sectors are heavily involved and impacted by the pandemic in various ways. Some of which might seem obvious, some of which are very complicated and maybe a bit harder to grasp. As the pandemic continued there will have been mounting pressure on these industries in various ways in terms of workers, in terms of manufacturing, even as some of these countries are beginning to emerge from the worst steps of the pandemic.
But there might have also been a sort of a lagging effect on the engagement, and many of the drivers as the ongoing impact of the pandemic really grinds on and starts to affect people over the longer-term. So although, there's the widespread adoption of vaccines and the impact of this, obviously, is going to be positive and perhaps, may have mitigated some of these negative impacts on these sectors. Again, these changes will take time to embed as well. And particularly if we look at healthcare there's actually going to be a different type of pressure on services as we start to leave the pandemic because of the backlogs, so the waiting lists that were caused by people who needed treatment that they didn't get, that was put off during the pandemic. I think as we go on in the conversation this is going to be interesting to dive into more deeply.
Another really interesting sector that we look at is transportation. Transportation was one of the lower ranking industries across the sectors to begin with, and this dropped four places from 11th to 16th, out of 17. In addition to this, in terms of the score change for engagement, it actually had the largest overall drop of 0.29 points, which was actually larger than pharmaceuticals, which was 0.23. So clearly there's something really significant that was happening within this sector. And obviously, this is a broad sector, there's different industries involved within transportation. There's been ongoing damage to this sector over time. So for example, less people traveling, less freight, less tourism, potential layoffs, uncertainty around future work security. All these things are going to have an impact. There were a lot of shutdowns across different aspects of this sector all around the world, people not traveling, potential health concerns, and public transport. And also potentially upticks in workload as well; freight, truck drivers, train travel, due to the impact on manufacturing. So lots and lots of upheaval within this sector. So it’s really understandable as to why this sector has been so heavily impacted and interesting to see that it was damaged even more than the healthcare and pharma industries which were more obviously impacted by the pandemic.
Brooks: It's really interesting to see how these engagement scores are mirroring what was happening in the real world. And while a lot of this might seem intuitive, it's great that we can quantify these numbers and really get a sense of what that means to people working in these sectors, so that organizations know that there are things they can address or what needs to be addressed, and we can dig into some of those areas in a minute. Before we dive a bit deeper into the individual engagement drivers, are there any other areas that you wanted to call out or any other particular sectors, maybe those that weren't on the front line?
Margrove: Yeah, definitely. It's a really good point and, in fact, if we can look at some of the other industries for a moment. Some of them actually seem to have virtually no change at all as a result of the pandemic in terms of engagement scores. The sectors that were largely unaffected include software and services, technology, media, and surprisingly, energy and utilities as well. All of these showed no significant change. I think unlike other sectors there may have been less of an impact on working conditions, or people's job roles didn't really change. And some of those industries particularly, say, software or things involving technology, working with computers, or office workers had more of the ability to work from home. So perhaps this didn't have as much of an upheaval on people's individual lives, perhaps there was more security in those sectors, perhaps less layoffs because unlike say, transportation, those industries weren't damaged so much.
With media, that sector may even have benefitted from the pandemic because of more people staying home, more consumption of online content, more people watching movies and TVs, things like that. You can see how maybe there was even a counter-effect there. Critical services like energy and utilities as well, because those were crucial to how economies work, potentially those were less disrupted or less damaged. So basically people were still going into work as normal within energy and utilities. Obviously, with restrictions, mask wearing, and sanitary procedures being in place, but potentially those were less impacted.
And then also, a couple of final points that were interesting. There were actually industries that bucked the trend. If we look at capital goods, which is around production of materials that are used later on in manufacturing, so raw materials. And then manufacturing itself which, obviously, is a related industry, those actually increased in engagement score over the pandemic. Capital goods increased from 14th to 11th place in the ranking and went up by 0.17. And manufacturing went from 15th to 14th in the ranking and went up by 0.14. This is really interesting and it might not be immediately obvious why this may have happened and we can speculate but perhaps as vaccine production began to ramp up, more people were returning to the workplace. There was increased production, more job security, also maybe benefits of the social aspects of work. Being in work and being around colleagues and working together is something that has a number of benefits. Working together with colleagues, that was perhaps more of an impact. And I think probably a deeper dive into these is going to be worthwhile as we move later into the discussion and look at particular industries.
Brooks: Yeah, definitely. I mean, in many ways they seem one step removed compared to healthcare or transportation, for example, there's still that risk. But maybe there are more measures that organizations could put in place to safeguard their employees, as opposed to those that just had to really step up and deal with the worst of it, so all really interesting points, thank you, George.
Moving on from the overall engagement scores, let's now take a look at the performance of different engagement drivers within each sector. I'd be really interested to hear if these shed any additional light on some of those trends and patterns that you've just been describing? Going a level deeper, are there any particular drivers that stood out to you within particular sectors or overall trends across the different sectors? I'd love to hear your perspective.
Margrove: Yes, definitely. Let's do that, and you're right, there are some really interesting observations to be had when we start to look at the drivers, and obviously, those are related to engagement scores. So we're seeing some similar negative impacts that we'd expect to see across some of those sectors. But also some things which are slight contradictions, which are very interesting I think, which we'll come onto as well. If we look at healthcare, which as we already discussed was one of the big movers, there were negative impacts. For healthcare over this period, we're seeing really significant drops within workload. This is something that's been heavily impacted so people feel that their workload is higher, potentially less manageable, and again, you can imagine why that may take place over the course of the pandemic. Even if things are potentially starting to improve, still that long-term overwork can really start to impact people over the long-term. And also just the pressure caused by the excess mortality from the pandemic would really have an impact on people.
So that's one thing and that really makes a lot of sense. Also, if we look at strategy, which is around the employees understanding of where the organization is going. I think this is very interesting because if we think about this in a slightly different way, during the depths of the pandemic, strategy was very clear, it was about managing the pandemic. This was the immediate thing that everybody was facing, this was the number one issue. And in fact, as I mentioned before, lots of more routine healthcare activities and procedures and operations and things were just put off. As we're starting to emerge from the pandemic, there's been a little bit of a vacuum in terms of what's next—what's the big ticket thing that people are focusing on now as we start to emerge from the pandemic? And perhaps the healthcare industry has less focus on what was going to happen next.
If we look as well at pharmaceuticals, again, you know, we talked about why that's been really similar to healthcare. And in fact within pharmaceuticals, there's even more significant drops all across a large number of drivers. So this has been a really, really heavily impacted industry. Not just in engagement but actually in a large number of drivers as well. And every driver declined in score, some of them slightly, and some of them very significantly. Workload was the number one largest drop, minus 0.32, which is a really large drop. We also see significant drops in strategy, autonomy, and organizational fit. I think the answers as to why this may have happened are quite clear. Pharma companies being so central to the pandemic response, I mean, they're always likely to have really significant impacts on people's experiences and sentiments around work. So for strategy, like healthcare, perhaps that really strong focus on vaccines, there was a lot of very clear strategy within that industry. And then as we're starting to emerge into a post-vaccine stage, there was-- again, there was this vacuum of strategy.
Again, workload, this huge drop and there's potentially many reasons. In manufacturing, there's still a key focus on vaccines in emerging markets, the demand remains very high, production is still high. Countries are building up stockpiles, so still lots and lots of workload taking place within pharmaceuticals. Potentially new vaccine development as well, to cover different variants, lots of research, R&D and so on. And also, potentially, work on new vaccines or research that was put off as a result of the pandemic, priorities that are coming back into play. So hopefully, these will improve as we move further out of the pandemic, into this new COVID world.
The other one that I really wanted to touch on is transportation, which has been hugely impacted over the pandemic period. So some really major drops within the driver scores for workload, strategy, reward, support from managers, the biggest fallers, along with peer relationships, recognition, and freedom of opinions. And, in fact, just looking at some of these, so strategy was a 0.47 reduction. I think that's one of the biggest fallers overall across all of the drivers and all of the industries, so really, really large impact there. And as we touched on before, I think transportation was one of those sectors really heavily impacted by the pandemic, lots of people not traveling, holidays disrupted, canceled, people avoiding public transport due to fears around the pandemic. Some of us may have had the experience of traveling by train or bus and being the only person on the service. That happened to me a couple of times, so you know, really major disruptions, and these have really negatively impacted these industries. We're seeing that now with air travel, in fact, with people who were laid off during the pandemic, now they don't have enough staff and they haven't been able to hire enough staff. It's now causing major delays in airports, canceled flights, lost bags and so on. So even now that's still happening.
I suspect as we look at the data through 2022, we're gonna see that and it's gonna take quite a long time for that to recover. Reduced numbers of customers as well, job uncertainty, separation from colleagues, pay cuts actually in some industries. Train drivers in the UK, for example, had their pay cut over this period, so that's gonna have impacted this industry as well. So lots of major impacts. Again, as we discussed before, logistics and freight are going to have been affected as well, although probably not as much as commercial travel. This I think is gonna continue for some time and it'll be interesting to see how this changes as we move forward.
Brooks: Yes, definitely. It sounds like a lot of those things are gonna continue to have a ripple effect, especially through the industries that you just discussed over the next year or potentially longer. So as you mentioned, it would be interesting to see where that goes. Up until now we've mainly talked about the industries that have been most directly impacted by the pandemic, pharmaceuticals, healthcare, transportation. But while those are the most obvious ones to focus on because the, the data mirrors that situation quite clearly, it'd be great to dive into some of the other industries that maybe bucked the trends, the ones that were able to improve engagement scores or hold a steady ground while a lot of others were going into negative territory. So if you could tell us a little about some of those industries, and some of the patterns you have observed, that would be fantastic.
Margrove: Yeah, definitely. As you say and as we hinted at before, in addition to the increases and stabilization of engagement scores, we saw some really interesting observations within the driver scores over this period, you know, with some having some really surprising gains, which perhaps we might not have expected. Capital goods, as we mentioned before, had a number of really significant driver score increases with minimal or no decreases across all the drivers. And we saw this as well with finance, software and services, uh, technology, with some really major increases across numerous different driver scores. As well as moderate increases for drivers in commercial and professional services, and media. Because there are so many improvements across all the individual drivers, I'm not gonna go into the details of these, but I'd like just to briefly discuss what these industries have in common, why this may have happened and what the implications of this are. A lot of these industries are office based, technology based, based on computers, and there’s a general improvement across driver scores. Although often in some of these industries, there were increases in driver scores but not necessarily as big increases in engagement. I don't know what the reason for that might be, but that's something I think we can probably look into in more detail in the future. But certainly environment, freedom and autonomy, and reward were increasing in a number of cases.
So perhaps this was reflecting an increase in more positive economic outlook over the course of the pandemic for these industries. We've started to come out from the pandemic but also maintaining strength or even increasing profits, particularly in media, as we discussed, and also perhaps a generally better ability for people to work from home. So over the period, people have gotten used to not working with colleagues, more accustomed to hybrid or remote working, they've got their home offices setup, everything's working efficiently. They're becoming used to it, and that may have had a positive impact. And also in some cases over the period, some industries may have started to return to work, or to return to work with increased flexibility and the benefit of being able to see colleagues. But also with a new hybrid work model, you know, working from home may really have had a positive impact on many people in ways that just didn't really happen prior to the pandemic where you were just expected to be in the office most of the time.
Whereas, if we look at those industries which are based on working with customers or working on a site. So, for instance, in warehousing or transport hubs or freight or even labs, in the case of pharmaceuticals, these industries you can't really have hybrid working. If you work in transport, generally speaking, unless you're in back-office functions, you can't work from home. If you work in a lab, you can't work from home. So even that hybrid working benefit that those other industries that are more office-based may have experienced, those probably weren't happening for a lot of workers in those other industries. And again, with the ongoing restrictions and economic damage and uncertainty caused to those industries, you can really see why there's this split between these two broad categories of industry. Those with technology and computers and working from home, and those where you're onsite having to do a job within a particular location where that just isn't possible. We see other interesting observations, where unlike the ones we've talked about where there were whole swathes of positive increases or negative increases, some of them actually have a big mix.
If we look at government, there was a big mix of increases and decreases. For instance, there were big increases in autonomy, environment, meaningful work, and support, but significant decreases in strategy and workload. If we look at retail, it was up on management support and relationships but down on workload and reward. And again, we can potentially speculate as to why this might be happening. Perhaps with retail this is representing the increased recovery and confidence in consumer spending that took place over the end of the year versus the beginning of the year in 2021. More shops opening, shoppers returning, more vaccinated members of the public, more vaccinated employees, more comfort with wearing masks and so on, and that sector recovering. And again, as we mentioned already, several sectors just remain remarkably unaffected, they just didn't really change. So nonprofits barely changed at all. In fact, only working environment changed, and increased significantly. And then consumer, there was a slight increase in work environment but nothing else. So obviously, those are both very broad sectors involving a range of employees and work types. So probably further breakdown of the different role types, if that was possible may add more detail. But it's interesting to see how these sectors which haven't really been affected may change as we fully emerge from the pandemic and if they just continue to stay the same or if they increase in the ways that some others have.
Brooks: Earlier you talked about the lagging effect and--
Brooks: --this data is obviously from 2021. So we have data up until the end of 2021, but with that lagging effect, as you mentioned, the strategy was maybe very short-term, dealing with those immediate threats within the industry. But as we start to emerge in 2022 and beyond, looking at a more long-term strategy, thinking about how those lagging effects are still going to impact employees and what organizations can do. I would imagine that's going to be a very important priority for these different industries throughout the year and even into next year. As you mentioned, manufacturing, there are still bottlenecks in global supply chains. There are peak periods throughout the year that have yet to come around again. So trying to keep that long-term view I would imagine is very important for these organizations, and move away from that short-term approach that has now become so commonplace just because of the impact of the pandemic.
Margrove: Yes. I think all of that's exactly right and it's going to be very, very interesting to see what happens next as we look at the next slice of data after this. There are obviously pressures in the world now that perhaps were less severe during the pandemic, particularly around oil prices, fuel, gas prices, that are particularly acute at the moment. So potentially that's gonna have an impact on certain industries, certainly manufacturing. It will be really interesting to see what happens next.
Brooks: Well, that's it. We'll have another installment of the State of Engagement to come so, hopefully, we can identify some of those trends as well and really dig into them.