Employee engagement in the UK has hit a concerning 10-year low, with only 10% of employees feeling engaged, compared to the global average of 23%, according to workplace consultants Gallup.
This is particularly alarming for the UK financial services sector, which faces significant challenges as generational shifts approach.
By 2025, Gen Z will make up a quarter of the workforce, while one-third of financial advisers are expected to retire within the next three years.
To navigate this transition, firms must improve their employee engagement and management practices to attract and retain the next generation of advisers.
Disengaged employees have 37% higher absenteeism and 18% lower productivity
As Gallup highlights, Gen Z has zero tolerance for poor management leading to disengagement. If it’s not working for them, they move on.
Indeed, the consequences of low engagement are substantial. Gallup research shows disengaged employees have 37% higher absenteeism and 18% lower productivity.
Disengagement also drives high turnover, as employees leave for more fulfilling roles, increasing recruitment costs and damaging customer service. Ultimately, low engagement threatens a company’s reputation and profitability, making it a critical business risk.
Despite businesses collectively spending £257bn annually on engagement initiatives – a figure comparable to the National Health Service budget – many still struggle to make progress.
Gen Z has zero tolerance for poor management leading to disengagement. If it’s not working for them, they move on
So, why are these efforts not yielding significant improvements?
Executive coach and former head of Vanguard UK distribution Neil Cowell and I have wrestled with this issue. Having worked with Neil for over a decade, including placing 14 key people into his team at Vanguard, we’ve gained valuable insights from both leadership and recruitment perspectives.
A pressing concern that must be addressed is the rise of “quiet quitting” – a trend that has gained momentum post-pandemic as employees reassessed their work-life balance.
Quiet quitting refers to employees doing the bare minimum without leaving their jobs. Alarmingly, Gallup reports that six in 10 employees now fall into this category.
This trend should serve as a wake-up call for businesses to rethink their workplace culture, recognition systems and communication practices.
Quiet quitting refers to employees doing the bare minimum without leaving their jobs. Six in 10 employees now fall into this category
While many leaders turn to “Taco Tuesdays” and “Beer and Pizza Fridays,” the real issue runs deeper. To address disengagement, leaders must cultivate a culture of trust, communicate clear visions and show genuine care for their teams.
When employees feel supported and valued, they’re more likely to go above and beyond. Leaders who provide feedback, foster collaboration and challenge their teams create an environment where engagement thrives.
The benefits are significant, with Gallup research showing high engagement can boost profitability by 21%.
However, many organisations continue to struggle in making meaningful progress. Substantial investments in engagement programmes often fall short because they rely on superficial approaches that lack authentic leadership.
High engagement can boost profitability by 21%
Employees can quickly sense when these efforts are merely box-ticking exercises, which only deepens disengagement.
To drive meaningful change, businesses need a more hands-on, tailored approach to leadership development. Leadership behaviours must align with structured engagement programmes for real impact. Strong leadership is the foundation of sustained engagement and, when coupled with thoughtful initiatives, leads to higher engagement and better organisational performance.
At the heart of employee engagement is what employees truly crave: a sense of purpose and connection. Employees need to understand how their work contributes to the broader goals of the company and why it matters.
Recognition plays a crucial role in this – not just through financial rewards but also through genuine acknowledgment of their efforts.
In about 80% of cases, when someone accepts a counter offer to stay in their current job, they still leave within a year
In about 80% of cases, when someone accepts a counter offer to stay in their current job, they still leave within a year. This underscores that employees are seeking more than just monetary compensation; they want to feel valued and supported by leaders who care about their development and wellbeing.
In conclusion, employee engagement is critical to organisational success. To make meaningful progress, companies must go beyond surface-level solutions and take a more proactive approach to identifying and addressing the root causes of disengagement.
By fostering a sense of purpose, recognising employee contributions and embracing authentic leadership, organisations can create a culture where employees are not only motivated but fully invested in the company’s success. This approach will drive sustainable growth, increase revenue and ensure a thriving, engaged workforce for years to come.
Simon Evans is director at Clearcut Consulting – Engage First
Why are you surprised? Governments fool around with pensions and savings. They bleat that people don’t save and then disincentivise them. What they, the banks and others do incentivise is spending. Buy on credit cards – owe a fortune. You can now just tap for amounts up to £100. How often do you see people keeping their receipts? Chop in your cars for expensive EVs – also on the drip. Nowadays you mainly see the price of cars expressed as a monthly payment. Not the cost of buying outright. Our economy relies on people spending what they don’t have, so we have one of the highest amounts of personal debt. And you are surprised that people don’t engage. They engage soon enough when there is a music festival or a concert with high prices.