With Brexit Uncertainty Looming, UK Businesses and Employees Lose Confidence in Economy

With Brexit Uncertainty Looming, UK Businesses and Employees Lose Confidence in Economy

The deadline for the UK to withdraw from the European Union is coming up in just two weeks, on March 29. This week, the UK Parliament voted against a deal negotiated between Prime Minister Theresa May’s government and EU leaders, against a no-deal Brexit, and in favor of delaying the Brexit date in order to buy additional time to figure out a solution. Any delay will require the consent of the 27 remaining EU countries, which is not guaranteed, and even with more time, legislators will still face the same tough choices.

As the clock counts down to the deadline, Brexit has created a lot of uncertainty for UK organizations and their employees, especially workers from other EU countries whose future status is up in the air. This uncertainty has done significant damage to UK employees’ confidence in the business environment, Gartner’s latest Global Talent Monitor report indicates:

Employee confidence in the UK business environment has slumped, according to Gartner, Inc. The latest data in Gartner’s Global Talent Monitor report for 4Q18 shows employee confidence in near-term business conditions and long-term economic prospects reaching an index score of 55.6, a decline of 7.5 per cent from an index score of 60.09 in 3Q18. These results follow a worldwide trend that has seen global business confidence sink to its lowest point since the fourth quarter of 2017.

This lapse in confidence was paired with a sharp decline in employees’ active job seeking behavior, which fell by 7.2 per cent from 3Q18. Amid declining perceptions of the job market, coupled with the highly uncertain Brexit outlook, employees’ intent to stay in their current jobs in 4Q18 increased for the first time in 2018, as did their willingness to go above and beyond in their present roles.

UK employers are staring down the uncertainty of Brexit in the context of a tight talent market in which it has become exceptionally challenging to fill critical skills gaps. The Global Talent Monitor data from the final quarter of last year suggests that talent attraction will be a major challenge for employers this year, regardless of what happens with Brexit, as employees take a more pessimistic view of the job market and become more averse to the risks inherent in changing jobs. (Gartner for HR Leaders clients can see all the latest data from our Global Talent Monitor here.)

Uncertainty is a key factor — perhaps the key factor — driving the Brexit panic, as illustrated by the Decision Maker Panel, a survey of 7,500 UK business executives that researchers from the Bank of England, University of Nottingham, and Stanford University have been running regularly to gauge the impact of Brexit on companies. Writing at the Harvard Business Review, the researchers ascribe declines in investment, employment, and productivity to Brexit-related uncertainty:

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Global Talent Monitor: Discretionary Effort Continues to Fall in US as Employee Confidence Dips

Global Talent Monitor: Discretionary Effort Continues to Fall in US as Employee Confidence Dips

In the past three years, the number of US employees willing to go above and beyond their employers’ expectations at work has fallen by 10 percent, from 27 percent in the second quarter of 2015 to 17.8 percent in Q2 of 2018, the latest data from Gartner’s Global Talent Monitor shows. Globally, employees’ confidence in business conditions has fallen for the first time since Q1 of 2016.

One possible driver of employees’ declining levels of discretionary effort is a lack of satisfaction with opportunities to grow and develop in their careers. Nearly 40 percent of employees in the US and globally ranked a lack of future career opportunities as their main source of dissatisfaction in a previous job, displacing compensation as the number-one driver of attrition both in the US and around the world. Over the past few years, we have seen development opportunity grow to be an increasingly critical element of the employee value proposition, both as a driver of attraction for new employees and, in its absence, as a reason for quitting.

“With recent U.S. reports showing little growth year over year in real earnings, workers hope to achieve more satisfaction in their jobs through better titles and opportunities to advance and grow in their current careers,” Brian Kropp, group vice president of Gartner’s HR practice, said in a statement. “To prevent further reduction in workplace effort and to retain top talent, employers should pay closer attention to employee dissatisfaction about the lack of career opportunities, particularly if wage growth remains stagnant.”

“Leading organizations are able to use their employment brand to illustrate why their career opportunities are better than their competitors,” he added. “A company’s EVP directly correlates to employee engagement levels, as workers are more likely to work harder and stay in their current positions if they are highly satisfied with their company’s EVP offerings. Gartner data shows that organizations with high levels of employee engagement report financial outcomes three times higher than firms with lower engagement levels.”

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When a Job Is ‘Just a Job,’ Are Employees More Likely to Quit?

When a Job Is ‘Just a Job,’ Are Employees More Likely to Quit?

A new survey from CareerBuilder claims that a 55-percent majority of US employees feel that they have just a job, not a career, and that 38 percent of these workers are likely to change jobs in the second half of 2017:

Almost three in 10 workers (28 percent) tolerate or hate their job. Of those who tolerate or hate their job, some of the top reasons for staying in a current position are the need to pay the bills (74 percent), its proximity to home (41 percent), needing the insurance (35 percent), it pays well (30 percent), or the job market is too tough (27 percent).

This survey picks up on something that we at CEB (now Gartner) have seen in our latest Global Talent Monitor data: Most US employees across a number of industries cite their future career opportunities as a leading reason for leaving their organization. Given this fact, it is easy to assume that this is a reflection that there is simply a lack of career opportunities available to employees, leading to disengagement and attrition. However, our data shows that this is not the case. We find that 12 percent of US employees we surveyed were actively dissatisfied with future career opportunities at their organizations and only 31 percent reported they were satisfied. The remaining 58 percent are somewhere in the middle—that is, neither satisfied nor dissatisfied, but rather neutral or ambivalent.

This finding suggests that while future career opportunities are a key part of employees seeking a new job, the claim that lack of future career opportunities is driving attrition at organizations is overstated. When we look at how an employee’s satisfaction with future career opportunities at their current organization affected their engagement levels, we do not see nearly as strong as a connection as CareerBuilder reports in their survey.

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