Loyalty of high-potential employees set to be severely tested by Brexit

While we may not be any closer to having a plan of action to leave the EU, it is widely accepted Brexit would cause major disruption. But what does that mean for our workforce and, in particular, top talent? Brian Kropp, HR leadership VP for global advisory group Gartner takes a look at the key areas of concern.

There is no question that Brexit has created social division. The narrow margin by which the referendum vote was settled, coupled with stagnant post-vote negotiations, has created a polarised social climate, fuelled in part by divisive public debates on key issues such as migration or nationhood. This lack of cohesion, however, does not stop at the door to the workplace. It can of course carry through into the way an employee approaches work.

While the UK government may be scrambling to find a Brexit safety net, employers are failing to predict how their workforce may respond to this significant, no-deal disruption. The majority of employers operate on the assumption that their employees will loyally knuckle down during times of strife, in order to protect the business and their jobs. Our research shows this couldn’t be further from the truth.

According to historical analysis from Gartner, one of the key trends to occur in the face of business disruption – as in the aftermath of Brexit – is that employee engagement plummets, with the loyalty of high-potential employees being considerably put to the test.

Brexit will be a stress-test for the loyalty of top employees

One of the clearest reasons why a drop in employee engagement – and, therefore, loyalty – occurs during times of disruption is that workers become more risk adverse. While executives want to believe that during periods of disruption their employees will “lean in” and help the business push through, the reality is that employees can “lean out”. In short, employees become more cagey about their business environment, as their confidence in external business conditions dampens.

Part of this leaning out stems from issues around recognition, compensation, and job security. Following the financial crisis of 2008, employees’ need for recognition increased considerably as they grew anxious about their roles in a disrupted economy. Between October 2008 and March 2009, the percentage of employees citing “managers recognising performance” as one of their top five most important employment value proposition (EVP) attributes rose by 15%.

During tough straits, most organisations will obviously ask more of their most trusted, high-potential employees, as they seek to ensure the best work is safely handled. Unfortunately, this increased workload often goes unrewarded.

As such, the loyalty and engagement levels of these high-value employees never recover. Under more pressure – but without any increase to their compensation, and without any guarantees of job security – one in four high potentials will leave their employer during periods of major disruption.

Furthermore, current data shows that, globally, workers are becoming less intent on staying in their current positions. Research from Gartner in 2018 showed a decline globally in employees’ intent to stay in their current positions (only 53 percent of workers in Q3 compared to 60 percent of workers in Q1). This marked the fifth consecutive quarter that intent to stay had declined globally.

It’s essential to reward and recognise value in difficult times

In order to rescue their business from this sapping of loyalty, employers and HR leaders should focus on redefining their strategies to engage and retain employees. Above all, it remains crucial that organisations do not lose sight of the drivers most commonly influencing employer value propositions (EVP).

According to our latest Global Talent Monitor report, the top four factors sought after by UK employees in their jobs were work-life balance, location, stability, and respect. Ultimately, the diminishing loyalty of high-potentials evidences a failure on the behalf of employers to speak to these values, and to provide what current – and future – employees value most.

Brian Kropp is group vice president of Gartner’s HR Practice. He oversees the research, tools, services and support that we provide to HR leaders and their teams. Brian’s Twitter and LinkedIn.