An Employee Engagement Shutdown

Nearly half of corporate executives tell Korn Ferry that the government shutdown is hurting morale of their own employees. How leaders can keep workers committed.

In just a few days, barring a negotiating breakthrough, nearly 800,000 federal workers will miss a second paycheck thanks to the U.S. government shutdown. The longer the impasse goes the more likely that the government employees, who traditionally are more engaged than their private-sector counterparts, begin to lose morale.

Indeed, executives in the private sector worry that the ongoing shutdown will impact their own organizations. In a new Korn Ferry survey, 63% of corporate professionals said they're worried the shutdown will have a negative trickle-down effect. Nearly half, 48%, say the shutdown is affecting the morale of their employees, and 31% say it is affecting the productivity of their employees. 

While the private sector doesn’t have a shutdown equivalent, it does have its fair share of traumatic events, including layoffs and division closings, that can sap employee engagement. “It’s critical for leaders to build a reservoir of good will during good times that can help carry organizations through the bad times,” says Mark Royal, a Korn Ferry senior director who helps firms with their employee engagement efforts.

According to executives at the World’s Most Admired Companies, a list prepared by Fortune magazine and Korn Ferry, an engaged workforce is essential to effectively cope with change. According to Royal, “One leader said that engaged employees are more willing to accept and embrace the organizational changes needed to address customer concerns and cost issues.”

When bad times do happen, it’s critical that front-line supervisors react quickly and professionally, says Alan Guarino, a Korn Ferry vice chairman and co-leader of the firm’s Board and CEO Services practice. While the CEO may send out an email or speak about the bad times, it’s an employee’s direct supervisor that package and frame it, Guarino says. During cutbacks, bad leaders may openly complain or not tell the whole truth about the situation, sapping employee engagement. At the same time, great leaders can help people who remain see the overall rationale and fairness. “Transparency, honesty, authenticity, are essential,” Guarino says.

That approach may not come naturally to front-line supervisors, Guarino says, so it’s essential for the entire organization to invest in leadership training. “A company’s future is more dependent on its culture than its technology,” he says.

To some degree, government shutdowns, layoffs, and other traumatic organizational moves end up being a gauge of an employee’s intrinsic motivation, or whether he or she finds reward in the work itself. Employers often try to motivate employees using pay or benefits, but most of their attempts don’t impact intrinsic motivation.

Indeed, according to Korn Ferry’s global employee opinion survey data, more than 40% of workers feel their firms aren’t doing enough—or anything—to motivate them at work. “That’s a lot of time wasted for both those employees and their employers, who are not getting the full impact of their potential,” Royal says.