Page 1Peakon Global Benchmarks Report Q3, 2021

Peakon Global Benchmarks Report Q3, 2021

Industry Changes Page 4

Page 2Peakon Global Benchmarks Report Q3, 2021

In the 6 months leading up to our September 2020 report, we observed a dramatic shift in scores across a range of our engagement drivers and sub-drivers (an increase of greater than 0.20 in 14 of 45 questions). We believe these changes related to the COVID-19 pandemic and the resulting changes to ways of working that affected organizations and employees all over the world.

In our update in February 2021, we observed an overall increase across our global benchmark for the Environment driver (0.22), and Autonomy - Remote Work sub-driver (0.19), as well as a decrease for the Strategy - Mission sub-driver (-0.22) within the healthcare sector.

In our previous update in June 2021, overall benchmarks remained stable with no notable change in overall engagement — the 14 drivers of engagement or their respective sub-drivers. Though the months preceding that report saw countries coming out of lockdown and an increase in the number of employees returning to their workplaces, it appeared that globally, employees’ experience of work had yet to change substantively.

Benchmarks Explained

To understand engagement across your organization, it’s essential to have a measurement that is anchored in real-world expectations. Our benchmarks consist of data points from over 190 million unique surveys all using the same model of engagement, and we continuously collect information on how the scoring behavior of employees is changing in response to external circumstances.

Page 3Peakon Global Benchmarks Report Q3, 2021

It has been widely reported in recent months that employee ‘quit rates’ and ‘intention to turnover’ have increased substantially since April of 2021. This despite many countries reporting labour shortages or relatively low unemployment rates, particularly in the US (Bureau of Labor Statistics, 2021), UK and Europe (Weber, Adăscăliței, 2021).

This phenomenon - coined the ‘great resignation’ by Anthony Klotz, an associate professor of management at Texas A&M University who has studied employees leaving their roles — appears to be contrary to expectations: turnover intent generally decreases in times of economic uncertainty (Kelly, 2021).

With millions of workers rethinking what work means to them and how they want to be valued by their employers, the ‘great resignation’ trend could just be getting started — beyond the initial waves of record-setting turnover reported in some industries and regions. From our latest Great Regeneration report, we have identified that 27% of current employees have similar scoring behaviors to employees who have left over the past year.

We expect to see the impact of this in our next benchmark updates, for our current update overall engagement remains unchanged as seen in our Engagement - Loyalty question (“How likely is it that you would stay with [Company Name], if you were offered the same job at another organization?”).

The reason for this is likely due to while the ‘great resignation’ was first reported since April, it may be that the trend has not influenced employee responses for a sufficient enough period to impact our benchmark scores. The shift in responses has not been large enough to result in a noteworthy decrease

in scores: in order to smooth out any large peaks or troughs in the benchmark data, our benchmark scores are the aggregate of employee responses from the preceding 12 months.

Benchmark Updates

In our latest analysis of benchmark data, we were unable to identify any noteworthy change in overall benchmarks across our engagement, health and wellbeing, and diversity and inclusion drivers.

We do however, see movement of greater than 0.2 in a handful of questions for two industries: Healthcare and equipment (five questions) and Retail (two questions), as explained in this report.

The Current Landscape

Page 4Peakon Global Benchmarks Report Q3, 2021

Health care & equipment

In our last report in June 2021, we observed increases across 10 engagement questions in our benchmark for the Health Care Equipment & Services industry, which includes healthcare providers and health care equipment and supplies. Drivers affected include: Autonomy and Autonomy - Remote Work; Engagement - Belief; Environment - Equipment; Growth - Career path; Organizational Fit - Support; Peer Relationships - Friends; Recognition, Reward; and Workload.

We believe these changes reflected a decrease in pressure on organizations and employees (as evidenced by the increase in Workload scores) as COVID-19 cases and hospitalizations decreased in most countries. This also explained the increase in Autonomy and Peer relationships, as employees have more time to consider their approach to work and socialize with coworkers. It would also explain increases in Growth- Career Path, Organizational Fit - Support and Recognition, as managers have more time to focus on supporting employees in ways that may not have been a priority in the past 12 months.

In our current analysis however, we see decreases in five scores: Engagement - Belief (-0.29), Growth - Career Path (-0.36), Reward (-0.22), Strategy - Communication (-0.22), and Strategy - Mission (-0.23). We suspect these decreases (particularly the reversal of improvement previously noted in Engagement - Belief, Growth - Career path and Reward) correspond with the increased pressure on healthcare workers as covid cases and hospitalizations have increased following the mid-2021 low point.

This again appears to be evidenced by a decrease of 0.19 in Workload scores. The decreases in Strategy and Strategy - Mission scores (given that we did not see improvement in these scores in our last report) suggest that employees are feeling less connected to their organization’s mission and purpose.

Retail

In our current analysis we also see a decrease in scores in the Retail industry for the Organizational Fit - Support (-0.2) and Workload (-0.2) questions. It seems likely these scores, which reflect employees experiencing greater workload and less support from their employer, relate to the labour shortage that many countries are currently experiencing (as we reported in our last update). Many retailers have recently reported difficulty in sourcing and retaining employees, leading to greater reliance and pressure on existing employees.

Industry Changes

Page 5Peakon Global Benchmarks Report Q3, 2021

Until now, Peakon’s industry benchmarks consisted of 25 industries. With our latest update, we are adding 1 new industry - Consumer Discretionary to bring the total to 26. Existing industries will remain the same, and if you want to update the benchmarks you are using based on the new additions, you can easily do so in your admin settings.

New Industry Benchmarks

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Compared to the stark changes that occurred in 2020, it appears the current changes are more nuanced to industries as organizations continue to respond to employee feedback.

The benchmarks will continue to shift in the coming quarters as organizations look to return to the office and embrace new ways of working. With the right tools and insights, it’s possible to not only understand what employees want, but take action on their feedback in a way that paves the way to a brighter future.

This is why we will continue to provide quarterly updates about the changes you need to be aware of. If you want to learn more about Peakon benchmarks contact your Customer Success Manager or get in touch with a member of our team.

Conclusion

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References U.S. Bureau of Labor Statistics (2021). Job Openings and Labor Turnover. Retrieved September 27, 2021, from https://www.bls.gov/news.release/jolts.nr0.htm

Weber, T. and Adăscăliței, D. (2021). Tackling Labour Shortages in EU Member States. Retrieved September 27, 2021, from https://www.eurofound.europa.eu/publications/report/2021/tackling-labour-shortages-in-eu-member-states

Kelly, J. (2021, June8). Why The ‘Great Resignation’ Is Greatly Exaggerated. Retrieved September 27, 2021, from https://www.forbes.com/sites/jackkelly/2021/06/08/why-the-great-resignation-is-greatly-exaggerated/