Workplace stress: new report’s alarming findings

Garreth Hanley:
This is INTHEBLACK, a leadership strategy and business podcast, brought to you by CPA Australia. Welcome to INTHEBLACK. Today, we're talking about stress in the workplace. Recently, Gallup has released their 2023 State of the Australian and New Zealand Workplace report, which identified that five out of 10 Australians are experiencing ‘a lot of stress’ at work, while 67% are quiet quitting and only 20% are thriving. To dig into the details behind these numbers, we're talking with Allan Watkinson. Allan is a principal at Gallup Australia and he's an expert in organisational development, talent management and leadership. He consults with senior business leaders on a raft of topics including employee engagement, leadership development, employee selection and succession, and leveraging the strengths of individuals and teams. Welcome to INTHEBLACK, Allan.

Allan Watkinson:
Thank you, and nice to be here, Garreth.

Garreth Hanley:
Nice to have you, thanks. Allan, it looks like there's a link between disengagement and stress, and we've all heard a lot about quiet quitting recently since the term rose to prominence in early 2022. This got me wondering, is quiet quitting a new phenomenon or is it just a new buzzword for an age-old issue? Or did our expectations and engagement change significantly due to COVID-19? What are your insights on this?

Allan Watkinson:
Interesting question. It's a new term for something that has always existed. So if you think about three categories of employees in any organisation today in Australia and globally, you've got your engaged employees who are working for you, your owners of the business essentially. An engaged employee has a very strong ownership mindset. They go above and beyond, give discretionary effort as and when required and almost all the time, and they act like owners of the organisation. They're more likely to say we or us rather than me. So they're working for you and they tend to be highly valuable employees that actually you'd never want to lose, and they're highly motivated, not just for their own work, but actually towards the work of others and highly aligned to the organisation.

So, that's your engaged employees. The second type of employee is your not engaged employee, and that's where we talk about the quiet quitters. You're not engaged employees look quite different to engaged employees and they're working for themselves psychologically and emotionally. So they tend to give discretionary effort, but it's much more selective and it tends to be more about personal and professional pride.

So in a way that they're working for themselves, they're much more likely to say me rather than we. They can be sometimes your highest performers in the organisation, but they don't have that strong ownership mindset towards their work beyond their own work. They're almost like individual contributors in the way that they turn up to work. We call them quiet quitters because it's a new term that I think is elevating the importance of addressing workplace conditions to engage this group. And the fact that this group tends to be the biggest proportion of employees in organisations and they tend to be a little bit invisible in terms of their disengagement, they don't tend to be always proactive in trying to talk to their manager to address any engagement needs, so they're effectively like quiet quitters.

There's a range of behaviour in this category as well. At the upper end, you've got your employees who are highly valuable, give discretionary effort regularly, but it's their personal professional pride that drives them. At the lower end, you've got your employees who do just enough to avoid losing their job. You always wish you could get more from them. But again, they're not always highly visible in their disengagement, so that's why we call them quiet quitters. So, that's the second group. The third group is actively disengaged, those employees who are working against you.

Not bad people, but they tend to find themselves in a very negative state of mind and they spread that negativity to the people they work with, which is why they're particularly difficult to deal with. So, to give you a bit of a sense of the Australian work environment, in our latest research, 20% of employees are in that engaged or thriving category, those owners. 67% are in that quiet quitting category, so two thirds of Australian employees on average are in that category and the balance are in that actively disengaged category.

Garreth Hanley:
It's really interesting, and it's fascinating to see that disengagement while people are employed can be even more stressful than being unemployed, especially when you consider the rising cost of living and the stresses associated with looking for work. The report did identify differences between those who are engaged and those who are actively disengaged, as well as differences based on age and gender. Allan, what does the data tell us about people's workplace experiences and the differences between those who are engaged, disengaged, and unemployed?

Allan Watkinson:
What's interesting, we see that probably the worst case scenario for an employee is that they're actively disengaged at work. And as I mentioned earlier, it's that category of employees who are working against the organisation. They're cynical, they tend to get in the way of change. They tend to spread that disaffection they have in the workplace as well, and they're often very hard to lead. In my line of work, get often asked by clients when we present their engagement data and we tell them that 8 or 9, 10% of their employees are actively disengaged.

They say, "Look, tell us who they are and we'll look after that problem quite easily." And I say, "I would never share that data and I don't get to see that, but you don't need me from a Gallup perspective to tell you who your actively disengaged employees are. They stand out." It's very hard to hide that state of mind. And the problem with being in that actively disengaged state of mind is that it tends to be very, very stressful, and those individuals are more likely to leave the organisation if they get another opportunity, but many of them will stay in your organisation and bunker down in their unhappiness and affect everything you are trying to achieve as an organisation because they may not feel like they've got a better offer or another alternative, better the devil you know.

So it's a terrible place for an individual to be actively disengaged, highly stressful. And so, engaged employees tend to be less stressed than actively disengaged, but even engaged employees are not immune to stress. And in fact, when we look at our latest research in the state of the Australian workplace, what we find is that Australians on average are slightly more stressed than the global average. In fact, around about 44% of Australian employees say they experienced a lot of stress in the previous day, which is above the global average. And it's interesting, when we ask Australians to talk about their life situation and their wellbeing, they tend to report higher levels of wellbeing. And we all know as Australians, how lucky we are to live in Australia and work in Australia, yet we tend to be more stressed than the global average, which is interesting. I think it talks to two problems. It talks to problems in our workplaces, that it is stressful. It's a stressful period of time.

We're going through the rising cost of living, but our workplaces aren't helping us deal with stress very well because the conditions are not right for human beings to thrive in. We're still very much in the past of dealing with people coming to work in a transactional way rather than a very human way. And the second problem I think around stress and the reason why we're more stressed than the global average is that we have very high expectations of our work and our life in Australia. So on one hand we realise how lucky we are, but on the other hand we say we're very, very lucky, so therefore life should be better than it is. But yet, with those high expectations comes very high levels of stress.

Garreth Hanley:
It sounds like it's not good for either party, really.

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Garreth Hanley:
The research indicates that nearly half of employees are actively job seeking or keeping an eye out for better opportunities. Maybe that's not surprising that engagement plays a key role in that number. Can you elaborate on how engagement levels affect job seeking? I'm also wondering, do we know if these people are looking for a new role within their current organisation, or are they looking for a new employer?

Allan Watkinson:
They tend to be looking for a new employer. Our research looks at two aspects of an employee environment. We look at the likelihood of someone to be looking for a new role outside the organisation, and we also look at people's perceptions on whether they think it's a good time to find a new role. And the answer to both of those questions is that there are a high proportion of employees in Australia looking for the next role. Almost 50% are looking for their next role, and around about 61% of employees in Australia feel like it is a good time now to find a new job.

And I think that's pretty consistent with other reports out there. It's very much an employee's market. So whilst some economic headwinds at the moment and rising cost of living, you still have very low, historically low levels of unemployment, and there are very good job prospects for many areas of the economy. So with that comes this increased appetite potentially to move. One of the things that organisations can do is to increase engagement levels because when we see engagement levels increase, we tend to see reductions in voluntary attrition from companies, and we tend to see the likelihood of employees looking for another role falling significantly as well. So engagement tends to be one of those things that organisations can do, which is within their control and influence, that impacts the potential to hang on to good people, attract and retain the very best.

Garreth Hanley:
And avoid the cost of retraining new people, I suppose too?

Allan Watkinson:
Absolutely, significant costs in losing good people.

Garreth Hanley:
A lot's changed in the last few years and with almost half the workforce now operating in a remote or hybrid work arrangements, does the research indicate that bringing people back to the office will reduce stress levels or, I don't know, maybe increase stress levels? Or are there other strategies that can reduce stress in both hybrid and non-hybrid working environments?

Allan Watkinson:
Over the last few years, obviously COVID was a great experiment in remote working, and many employees reset their expectations on the flexibility that they expected and want in their jobs. So post-COVID, now many organisations as we know are struggling to get the balance right and get people to come back into the office. And a lot of employees like working from home from time to time. It suits them. Some employees love working from home all the time, never want to come back. Some coming back to the office all the time, but hybrids tends to be a very popular choice.

From an engagement perspective, two to three days in the office tends to be the sweet spot for engagement, and that's a US statistic. I don't think it all translates completely to different cultures, but I think in Australia it does translate. The interesting thing is that the stress levels tend to go up and down with engagement levels. So if you can improve engagement, you reduce stress. We know that. The quality of the workplace has almost a four times bigger impact than where people work. So the whole hybrid work from home, work in the office focus is a little bit of a distraction in the context of engagement and stress.

What is much more impactful on engagement and stress levels is actually whether organisations can create a high quality workplace which is focused on the fundamentals that human beings need to thrive at work, and we'll talk about those shortly, but the quality of the workplace is very, very important. And so the quality of your managers and how they manage their teams, whether they're remote or in person, is really the key driver of stress levels in the workplace.

Garreth Hanley:
Maybe it's a bit of an easy thing to identify, but not the right thing to identify.

Allan Watkinson:
Correct.

Garreth Hanley:
Interesting. I think, Allan, it goes without saying that we all want to create workplaces where everybody enjoys themselves, but I'm thinking maybe sometimes managers don't realise that there's an underlying problem. Do you have any advice for managers who sense their team might be stressed, or maybe just want to gauge workplace stress levels?

Allan Watkinson:
Look, I think there's no substitute for getting the team together in person or virtually or however you bring your team together as a manager. Bring the team together to talk about how are we going as a team. I think in my experience, a lot of managers have regular meetings with their teams and I ask them to share their meeting agenda with me, and it tends to be full of work things, "Let's talk about project A or project B," or whatever it is. There's nothing wrong with that because that's why we're here, we're paid to deliver the work, but they don't spend enough time stepping back and thinking about how we're going as a team, how are things going, how are we feeling? Where are things that we can do better? Where are things that we're already doing well? And so it's making sure that every manager carves out some time in their regular meetings just to check in on the team dynamics and how we're doing.

That improves performance. We know that high-performing teams do that much more often than average or poor-performing teams, and it tends to reduce stress levels as well because people feel supported. They feel like they've got a support network and they can voice some of their challenges and realise that maybe they're not feeling on their own around their stress levels. And so we know that when we get the teams together to talk about how we're going, for my team at Gallup, I like to ask three questions regularly. I say, "What are we doing well as a team that we always want to keep an eye on or keep focused on, keep doing? What do we need to do better as a team to improve our performance? And then what should we do next?" And that's really a couple of key actions that will help address workplace stress, improve performance. The nice thing is you can focus on a few key actions that can achieve both at the same time.

Garreth Hanley:
So it sounds like you've built a structure around that process of checking in?

Allan Watkinson:
Absolutely. And it's a simple thing, but it's often missed or overlooked. And so, make your meetings a little bit more human-focused rather than transactional, so about the people and the work, not just about the work. And that can be a bit uncomfortable for some managers if they're not used to that sort of conversation, opening up the conversation, but that sort of ‘well-better-next’ structure I just mentioned can help open the door a little bit to stepping back and saying, "How are we going as a team?" rather than, "Let's dive into project X or issue Y."

Garreth Hanley:
Interesting. Sometimes starting the conversation is the hardest part of the conversation.

Allan Watkinson:
It is, and I think managers need to remember that it's human beings coming to work that they're dealing with. That can be challenging, but at the end of the day, no matter what people are doing, they are still human and they need their human needs met. They value those things we talk about, and we need to develop a good habit in our team getting used to talking about the team itself. And that can take time, but I'd encourage all managers just to chip away at it and to open up the conversation and see where it goes.

Garreth Hanley:
It does sound like increasing engagement is the way to improve work satisfaction and then that will reduce the stress levels. Is that right?

Allan Watkinson:
That's right. It's a simple relationship between engagement and stress. And so again, engaged employees aren't immune to stress, but they experience significantly lower stress. And I think the things that managers can do in terms of getting the team together to talk about how the team's going, the other thing that managers can do is really think carefully about the conditions that they can create or influence that will actually really create that kind of high quality workplace that I mentioned before. Because we know from an engagement perspective, managers explain at least 70% of the variance in engagement scores when we measure engagement for organisations, 70%.

Garreth Hanley:
That's huge.

Allan Watkinson:
So engagement's very local, it's driven by managers. People join companies, but they leave managers very often.

Garreth Hanley:
That's interesting. There's always a lot of talk around culture, but I guess this is more of a localised phenomenon that you're talking about rather than a broader company culture.

Allan Watkinson:
Correct. And sometimes when organisations do employee surveys, they tend to focus at the wrong level and the surveys are too long. I mean, 100, 150 items in the survey, and the poor old managers get so much data back, they don't know what to do with it, and so therefore they do nothing, or they don't know which are the most important aspects. So it's very important when doing employee surveys to do a short, focused, localised survey that helps a manager know just what to focus on, whether it's role clarity, whether it's providing the materials and equipment, their employees need to do their work, whether it's a bit more recognition or a bit more focus on their development. A good engagement diagnostic can help pinpoint where a manager can focus.

Garreth Hanley:
It's really interesting, Allan. We are running out of time today, but it does sound like what you're saying is that managers are the key to reducing workplace stress. Is that a fair summation?

Allan Watkinson:
Absolutely. Managers play a key role, and so the quality of your managers as an organisation plays a key role, not just in reducing stress, but improving performance generally. And so therefore, the investment in manager capability, the ability to make the right hiring decisions into management roles is key as well.

Garreth Hanley:
Thanks, Allan. That's been great today. We'll leave a link to the report for Australia and New Zealand in the show notes. And thank you so much for joining us today, and thanks for your insights.

Allan Watkinson:
Been a pleasure.

Garreth Hanley:
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