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Business Journal
Disengaged Employees May Be Impeding India's Growth
Business Journal

Disengaged Employees May Be Impeding India's Growth

by Steve Crabtree

Among Indians who work for an employer, just 9% are engaged.

Rapid growth and development in emerging-market countries such as India, China, and Brazil has dramatically changed the world's economic landscape over the past decade. In many cases, these fast-paced changes have come with growing pains. For instance, some social sectors benefit more than others from economic growth in these countries, resulting in widening income inequality.

Gallup's State of the Global Workplace report suggests another factor could be just as threatening to the pace of growth in emerging-market countries: low levels of employee engagement. Aggregated results for employees in 23 emerging markets surveyed in 2011 and 2012 reveal that about one in 10 employees are engaged at work -- nearly half the proportion found across 23 developed-market countries.State of the Global Workplace

Engagement results are even more troubling in one of the world's most populous emerging markets: India. That country's economic boom, driven largely by rapid growth in IT services and business process outsourcing, has slowed dramatically in recent years. The World Bank put India's GDP growth rate at 3.2% in 2012, down from 10.5% in 2010.

As with many emerging-market countries, a range of structural problems has cropped up to complicate India's prospects for long-term growth -- but key among them is the productivity of its labor force. Increasing productivity requires addressing the country's huge gaps in access to opportunity with more equitable investments in elementary and secondary education for millions of poverty-stricken Indians.

It also requires more small and medium-sized businesses throughout the country to be capable of creating and growing employment opportunities by attracting and retaining customers. For this, Indian business leaders need to engage more employees, tapping the full extent of their talents, skills, and ideas to create and expand domestic markets and develop loyal customers. Yet among Indians who work for an employer, just 9% are engaged, while 31% are actively disengaged.

India’s Employee Engagement Challenge

Engagement varies by education level and job type

There is considerable variation in engagement levels in India by education level and job type. Among employees in professional, managerial, sales, service, and administrative roles, engagement rates are above 10%, while they fall below that threshold among employees in roles that often involve physical work, such as installation/repair, construction/mining, and manufacturing/production.

These last two job types have high proportions of actively disengaged employees: 44% of construction and mining workers in India are actively disengaged, as are 32% of manufacturing and production workers. Engagement among employees in these industries is somewhat lower across all countries Gallup studied because the traditional management mentality tends to put process ahead of people. However, the differences appear to be particularly sharp in India, a country that has long struggled with entrenched social divisions.

Engagement in India by Education Level and Job Type

Recent labor unrest in India reflects the widespread frustration in the construction/mining and manufacturing/production job sectors. The past two years have seen large-scale strikes in the country's automotive, airline, and petrochemical industries, among others, leading to concerns about the social instability and lost productivity created by resentment and unhappiness among workers. As Gallup analysis shows, actively disengaged Indian workers are more likely to have experienced anger and stress the day before the survey and less likely to say they were treated with respect, compared with engaged and not engaged Indian workers.

Disengaged Employees in India Report More Anger and Stress

Providing jobs for 250 million young people

Improving industrial workers' outlook is crucial for India's economic future. Economists note that the country's manufacturing sector must grow for India to experience more broad-based development and provide enough jobs for the 250 million young people who will soon enter the workforce. To expand India's manufacturing base, the country must make its regulatory environment more hospitable to manufacturers while tackling structural problems such as discrepancies between the salaries of permanent workers and those of the large number of temporary contract workers in these industries.

Another challenge facing India's manufacturing industry is moving informal-sector employees to larger formal-sector businesses, which tend to be more efficient because they reap economies of scale and have greater access to credit from formal financial institutions. Though the U.S. Bureau of Labor Statistics estimates that two-thirds of India's manufacturing output is produced in the formal economic sector, most of the country's manufacturing jobs are in the informal sector -- such as small-scale enterprises primarily operated by family members and not regulated by any agency or state government.

Larger manufacturing firms often seek to retain the dynamism and entrepreneurial spirit of employees in smaller businesses during this transition. To accomplish this goal, businesses must help employees feel respected by their managers and engaged in their jobs. Gallup's employee engagement analysis offers good news, showing that the same management and workplace factors that define engagement predict improved performance outcomes across industries and job types. Managers in manufacturing companies can do a lot to close the communication gap with employees and give them a greater sense of psychological commitment to their work.

Engaging India's industrial employees

Most manufacturing and construction jobs are routine, so managers in these companies must remain constantly aware of employees' need for close communication, regularly providing information about policies that affect them and individualized feedback and recognition. Managers in India's industrial sectors also must guarantee that all employees have regular opportunities to express their opinions about working conditions and their ideas for improving them.

In manufacturing and construction workplaces, where safety issues are often a concern, communication is essential not only for helping employees feel respected but also for improving working conditions to reduce the risk of injury on the job. Gallup's 2012 Q12 meta-analysis of 192 organizations in 34 countries shows that workgroups in the top quartile of employee engagement scores had 48% fewer safety incidents than did workgroups in the bottom quartile.

Even among highly standardized job types, managers should seek to provide employees with as much autonomy as possible. Recent research by Shane J. Lopez, Ph.D., a Gallup senior scientist and one of the world's leading researchers on hope, finds that people who truly love their jobs find ways to shape those jobs to better suit them. "Regardless of whether you're working on an assembly line or on a sanitation crew or as a banker, autonomy is necessary but not sufficient for loving your job," says Lopez, author of Making Hope Happen. "If you have some autonomy, you can do a little more of what you do best every day. ... And your boss holds the key to that autonomy."

Promoting workplace harmony and boosting productivity

Cultivating workplaces that treat employees as individuals rather than as cogs in a machine may help improve the desirability of manufacturing jobs among India's youth. To sustain its economic development, India must expand job opportunities in all economic sectors -- but realize that the country's manufacturing potential is particularly important. India will rely on companies that have learned to promote workplace harmony and boost productivity by harnessing the energy and initiative of engaged employees to lead the way.

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