PEOPLE EXPERIENCE & ENGAGEMENT

McKinsey & Company | Some employees are destroying value. Others are building it. Do you know the difference? | This article explores six employee archetypes across the satisfaction spectrum, from value-destroying disruptors to thriving stars, and provides strategies for organisations to boost engagement, productivity, and retention.

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✨ OVERVIEW

McKinsey's research reveals six distinct employee archetypes: satisfaction, engagement, performance, and well-being. These range from highly dissatisfied and actively disengaged workers who destroy value to "thriving stars" who perform exceptionally and positively influence others. The study highlights that over half of employees report being relatively unproductive, costing companies billions in lost value over time. By understanding these archetypes and implementing targeted strategies, organisations can re-engage workers, amplify the impact of top performers, and significantly improve overall productivity and value creation.

🧩 CONTEXT

In the wake of the pandemic and the shift to hybrid and remote work models, companies are struggling to measure employee effectiveness objectively. This challenge is compounded by increasing labour costs and declining worker productivity. The research indicates that addressing employee engagement is not a one-size-fits-all approach; workforces have diverse experiences and needs. To tackle this issue, corporate leaders must recognise the nuances within their workforce and develop segmented strategies to enhance engagement, satisfaction, and performance across different employee groups.

🔍 WHY IT MATTERS

• Lost productivity from disengagement and attrition can cost a median-size S&P 500 company at least $1.1 billion over five years.

• Higher satisfaction and commitment levels correlate with higher self-reported performance and well-being.

• Engaged employees are likelier to contribute innovative ideas and drive organisational growth.

• Improving engagement can reduce attrition rates, saving time and resources on recruitment and training.

• Prioritizing employee well-being demonstrates organisational values, building trust and loyalty.

💡 KEY INSIGHTS

• Six Employee Archetypes Identified: The research reveals six distinct employee groups: quitters, disruptors, mildly disengaged, double-dippers, reliable and committed, and thriving stars. Each group has unique characteristics and requires tailored engagement strategies.

• Disengagement Factors Have Significant Impact: The top six factors affecting employee satisfaction and commitment capture nearly two-thirds of the total cost to companies from disengagement. When not addressed, these factors become disengagement drivers for many of the workforce.

• Working Models Influence Performance: Thriving stars, who represent about 4% of the workforce, are more likely to flourish in hybrid and remote-working models than in primarily in-person settings. This suggests that the working model significantly impacts balancing satisfaction, commitment, well-being, and self-reported performance.

• Double-Dipping Phenomenon: About 5% of the workforce are "double-dippers" who hold multiple full-time jobs simultaneously. This group is split between engaged contributors and those who may be chipping away at organisational efforts.

🚀 ACTIONS FOR LEADERS

• Re-engage High Potential Quitters: Identify high-potential workers exploring other options and take proactive steps to make them feel valued. Ensure compensation packages and benefits are competitive, and design clear career paths with meaningful role changes.

• Address Disruptors Constructively: Reject the notion that disengaged employees are inherently toxic. Instead, focus on meeting their needs through career development opportunities, connecting their work to a higher purpose, and ensuring fair compensation.

• Elevate the Mildly Disengaged: Target similar EVP factors as for disruptors while adding flexibility and autonomy. Offer opportunities for development and a solid compensation package to help these workers cross the threshold towards engagement.

• Manage Double-Dippers Strategically: Focus on dissatisfied double-dippers by improving compensation to market average and adding benefits. Work with HR to map clear career paths and role responsibilities.

• Support Reliable and Committed Employees: Recreate conditions that work best for high performers, focusing on meaningful work, flexibility, and a supportive workplace environment. Ensure fairness in recognition and rewards.

• Nurture Thriving Stars: Protect these value creators from burnout by limiting their project involvement and tapping into their sense of purpose. Balance high performance with high well-being to ensure sustainability.

🔗 CONCLUSION

Understanding and addressing the needs of different employee archetypes is crucial for organisations to enhance engagement, productivity, and retention. Companies can move more workers towards higher engagement and commitment levels by implementing targeted strategies for each group. This approach improves individual performance and contributes to organisational success and value creation. The research underscores the importance of flexibility, particularly in working models, as a critical factor in fostering high performance and well-being among top talent.

🎯 KEY TAKEAWAY

Organisations must recognise and address the diverse needs of their workforce archetypes to boost engagement, productivity, and retention. This could save billions in lost value and foster a more satisfied, high-performing workforce.

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