A recent LinkedIn post highlighted a study that points to decreased employee motivation among American workers over the past three years. According to a Wall Street Journal article, employees are less likely to work weekends, overtime or take on holiday shifts.
If employees are truly less engaged and less willing to take on more, this has significant ramifications to businesses. Some of these include:
- Reduced productivity as workers are opting out of overtime and taking on additional projects
- Higher costs if additional talent and headcount is needed to achieve the same output and
- Possible challenges with succession planning and strategy implementation as employees are content at staying within their current roles
This article focuses on why employee motivation may be fading.
COVID has impacted employee motivation
Although it’s been nearly three years, the COVID-19 global pandemic had a significant impact on individuals’ physical and mental health. According to a WHO study, the pandemic was responsible for a 25% increase in anxiety and depression worldwide during the first year of the pandemic.
Rightfully so as the pandemic forced all of us to fundamentally change our social, work and family lives in a single minute. For many, these changes have had a profound impact and have caused them to change their priorities.
Some employees have struggled with long COVID symptoms and has affected their ability to work. According to the Brookings Institute, approximately 2 to 4 million people are out of work associated with lingering, long COVID health challenges.
For employees who have struggled with long COVID, or continue to struggle with their health, it’s difficult to prioritize employer needs when your basic health needs are not being met.
Beyond employees dealing with health issues, many employees bear the responsibility to care for partners, parents and other relatives who may be dealing with health challenges from the pandemic. These employees have to make a choice to prioritize employer needs or family needs. Not surprisingly, employees are choosing family needs ahead of employer needs to prioritize.
Greater emphasis on mental health and well-being
Employers have been increasingly focused on mental health in the workplace over the last few years. A Harvard Business Review study from 2019-2021 highlighted increased mental health awareness within organizations to address attrition, diversity and inclusion initiatives and to ensure mental health conversations are being had at various levels of the organization.
Work weighs heavily on an employee’s mental health as Gallup noted in their latest State of the Global Workplace report that 34% of employees reported difficulty sleeping and 19% of respondents reported leaving a job due to stress at work.
Employees recognize the impact work can have on their well being and strive to find higher work-life balance and increased job satisfaction. Some employees noted in the Wall Street Journal article even gave up higher pay for increased work-life balance.
For many, the allure of working at hard-driving organizations like Tesla or working within abusive, toxic environments such as Better.com are no longer appealing.
Employees are valuing their own health and well-being rather than tying themselves to a brand, regardless of how well known or highly-coveted the organization is.
Gaps in pay vs. performance drives decreased employee motivation
Employees see the nominal returns that higher output and performance brings to them compared to the benefits to the organization.
Although inflation has cooled of late, the US inflation rate was trending at 7.1% as of November 2022 according to tradingeconomics.com. This is in stark contrast to a survey conducted by consulting firm, WTW, where employers plan to increase salaries 4.6% in 2023, up from 4.2% in 2022.
With salaries not keeping up with inflation, it’s not surprising that employee motivation is fading. The reward in higher pay is not commensurate with the added workload and added stress from employers.
On top of this, companies that do not have clear pay transparency policies within their organizations are creating great disengagement within their current employee base. According to CNBC, nearly one in 20 workers will quit if they find they are making less than their co-workers.
Employees who feel they are underpaid or undervalued by their employer will be less likely to put forth extra efforts for the organization and may focus on “side hustles” that show direct benefits for their efforts.
Employer layoffs create a less engaged workforce
2022 was a challenging year with the tech sector hit especially hard with layoffs affecting nearly 100,000 employees according to a recent CrunchBase article. Layoffs are difficult enough, but the need to fuse technology in the layoff process has led to efficient yet unemotional ways to fire employees via a brief, 15 minute Zoom call.
For the lucky co-workers who survive layoffs, their commitment levels and job satisfaction decline and result in decreased employee motivation. Forbes cited a study from the University of Canterbury that highlighted 36% of remaining employees experiencing a decline in organizational commitment and 20% in job performance.
Employees roll their eyes at employers who promote the “team” and “family” atmosphere within their organizations especially when those teams can be broken up and families “divorced” after a few bad quarters.
Employees have become more transactional, paycheck players, because organizations have forced them to have a contractor mentality.
So is employee motivation is fading?
Is employee motivation fading? All signs point to yes. Employers are asking employees to do more with less and the reward for employees is the ability to keep their current job and the aspiration for cost of living increases that fall short of inflation. The pandemic certainly hasn’t helped as priorities for many have shifted outside the office to their personal lives.
Organizations need to reward and retain their best employees. Some may be motivated by higher pay and above-market benefits while others may value flexibility working from home or a flexible schedule to manage personal needs.
Gone are the days where employees are lucky to have a job. Management needs to identify key talent and find ways to tailor a benefits package, work environment and career path to keep them engaged and motivated in the long run.
