Economic Slowdown: A Threat to Every Indian Workplace

When times are good, engaged employees make companies more profitable. When times are bad, engaged employees keep companies alive. And times could get very bad in India. The consequences of disengagement -from losing top talent to a negative impact on organizational culture, employee productivity, and efficiency - will hit harder than the consequences of a recession.

India's economic slowdown - long-feared since the beginning of the global economic recession - has begun. One of its early victims is Kingfisher Airlines, which struggled to survive since its launch in 2005.

Despite turmoil at the airline, some of its employees maintained a strong attachment with the company and its customers."[My boss] told me that I fly an airplane like a knife cutting through butter," said one co-pilot who - like many former Kingfisher employees looking for work at other companies - would prefer to remain anonymous. "Who says that to his employees? [It] was my first week at work!"

"He appreciated me when I was weak," the co-pilot added. "I should do the same."

That co-pilot's attitude is rare among employees in India. Eight per cent of all Indian workers are engaged - or involved in, enthusiastic about, and committed to their work - according to an April 2012 Gallup study. The country's low percentage of engaged workers is disturbing in any economic climate. But it is particularly problematic in a downturn because Gallup research shows that employee engagement is clearly linked to a company's profitability and productivity.

That connection to key business outcomes is why forward-thinking business leaders in India have invested in building engagement among their employees- and they should be glad they did. When times are good, engaged employees make companies more profitable. When times are bad, engaged employees keep companies alive. And times could get very bad in India.

What to do and when to act
As India's economic downturn begins to affect businesses, executives will start focusing on managing operating costs, such as cutting budgets for initiatives that affect employee engagement, to maintain their bottom lines. But cutting practices that positively influence employee engagement could affect companies' ability to survive and ultimately recover from the slowdown. And India does not have engagement to spare. As of 2012, 32 per cent of employed Indians are actively disengaged and 60 per cent are not engaged. These workers are emotionally disconnected from their workplaces and are less likely to be productive, just when their companies need their engagement and commitment most.

But activities that create and sustain employee engagement do not have to be expensive -and some of them don't cost anything at all. We recommend a simple strategy for improving employee engagement that focuses on:

1) Timely recognition. A pat on the back can go a long way, especially in tough times. Gallup's research with more than 15 million employees worldwide reveals that individuals who receive recognition and praise increase their own productivity, increase engagement among their coworkers, and are more likely to stay with their organization. They also receive higher loyalty and satisfaction scores from customers, and have better safety records and fewer accidents on the job. Timely recognition is one of the most effective ways to reward an employee, and it is free.

2) Ownership and career growth. Creating opportunities for employees to grow by creating accountability- even if that is for a small part of a project- can give workers the chance to stretch their talents and skills. This sense of increased responsibility can then increase engagement. Managers need to look for ways to help individuals take ownership of their work and develop as employees.

3) Personalised communication. "Know thy neighbour" creates a bond that is stronger than an employee-employer relationship. When managers know their employees and their families and celebrate their personal achievements and special days, they show they care about them as people and as workers.

A companywide focus on engagement that includes timely recognition, ownership and career growth, and personalised communication creates a culture where managers care about and encourage their employees' growth and development -and where employees are more likely to stand by the company during tough times. This kind of environment makes it easier for employees at every level to work collaboratively and productively.

Companies in India that offer their employees an engaging environment have a definite advantage. Even as the economic downturn creates a more turbulent, competitive marketplace, companies with engaged employees will be able to more easily adapt to change than their competitors.

Indian businesses, take note: Change is coming, and it is not going to be pleasant. Engaged companies can survive, and maybe even thrive, during an economic slowdown. But businesses must pay close attention to their workers'engagement. Investing in employee engagement now can pay big dividends as economic times become difficult. And in India, the clock is ticking.

Kanika Kohli is a Senior Consultant, and Meha Grover a Client Development Consultant with the Strategic Consulting firm Gallup based in India. http://businessjournal.gallup.com