Propelling the Nation towards Higher Economic Growth

India is enjoying robust economic performance, driven by strong GDP growth and the demographic dividend boosting the country's productivity. But how sustainable is this growth trajectory?

Slightly less than one-third (32%) of India's workforce is engaged, according to Gallup's State of the Global Workplace: 2024 report.
While this figure is higher than the global average of 23% engaged, the fact remains that two-thirds of Indian employees are either not engaged (48%) or actively disengaged (19%). In its latest report, Gallup estimates that low employee engagement costs the global economy US$8.9 trillion, or 9% of global GDP.

It takes a sustained effort to build a truly thriving culture of engagement. And that effort is required right now, given the growing concerns about a global mental health crisis.

Further, just 14% of Indian employees rate their lives as “thriving” according to Gallup's Life Evaluation Index - less than half the 34% global average - which asks employees to assess their current and expected future lives. Further, more than a third have experienced daily anger (35%) and stress (32%). An even greater 42% report having experienced sadness.

India also ranks above the global average for rates of workplace harm, with slightly less than one-third (30%) of the country's workers reporting they have experienced harm at work in the past two years, according to the Lloyd's Register Foundation World Risk 2024 Report | Engineering safer workplaces: Global trends in occupational safety and health. While India has made significant progress since 2021 when 38% of the country's workers reported having experienced workplace harm, high rates of harm continue to be present throughout the country, according to the report.

Life Evaluation

Please imagine a ladder with steps numbered from zero at the bottom to 10 at the top. Suppose we say that the top of the ladder represents the best possible life for you, and the bottom of the ladder represents the worst possible life for you.

On which step of the ladder would you say you personally feel you stand at this time? (0-10)
Just your best guess, on which step do you think you will stand in the future, say about five years from now? (0-10)

Taken together, these findings on the state of India's workplaces should be of great concern to company leaders. At the same time, the situation presents an opportunity for Indian employers to refocus their efforts on improving workplace engagement, safety and wellbeing while building on the country's economic momentum.

The importance of employee emotions

Emotions play an important part in human behaviour, decision-making and needs fulfilment. Employee commitment and motivation comprise a significant emotional dimension which organisations must measure and manage.

Thus, when we define the key drivers of organisational performance, we must remember that simply satisfying employees by fulfilling their rational needs is not enough. Today's constantly changing workplace requires organisations to heed their employees' emotions by measuring and managing engagement.

Engagement is predictive of performance

Gallup's Q12 Meta-Analysis: 11th Edition report highlights the relationship between workplace engagement and performance outcomes like customer loyalty/engagement, profitability, productivity, employee retention, safety incidents, absenteeism, shrinkage, patient safety, quality, wellbeing and organisational citizenship. Employee engagement is a leading indicator of business performance, workplace safety and employee wellbeing.

Engagement metrics can also help leaders identify factors in the workplace that can undermine employee mental health, wellbeing and safety. Effective engagement metrics are predictive of both positive and negative workplace outcomes and can help pinpoint areas of potential risk that need to be addressed.

When not diagnosed accurately, these risk factors can foster toxic work cultures that harm both employee wellbeing and organisational performance. For example, extreme workplace stress caused by psychosocial hazards and a toxic workplace culture may have been a contributing factor to the recent death of an employee working for the Indian subsidiary of a major global accounting firm. The use of accurate, predictive engagement metrics may have enabled the organisation to identify and address cultural risk factors before they posed a risk to employees' wellbeing and mental health

Measure what matters

Organisations should deploy engagement metrics that are correlated with productivity and other performance outcomes, and with employee wellbeing metrics that are essential to promote positive workplace environments. Employees want clarity of expectations, purpose and meaning in their work. They want to be recognised for what makes them unique. And they want strong, supportive relationships, particularly with a manager who can coach and inspire them to achieve their potential.

Organisations need engagement metrics that accurately portray the true state of the organisation and provide actionable insights for leaders and managers to address workplace issues. An engagement survey can be compared to a set of medical tests aimed at diagnosing a patient's disease, enabling doctors to prescribe a specific treatment or medication based on the results. However, using the wrong test could lead to a misdiagnosis of the patient's condition.

Equip your managers to engage

Gallup's research shows that 70% of the variance in team engagement is determined solely by the manager. Managers play a key role in driving team engagement, with HR acting as an enabler and facilitator championed by organisational leadership. Managers ensure that employees are supported, have clarity about what work needs to be done and can see how their work connects to organisational success. To engage their teams consistently, managers need to have ongoing coaching conversations with employees. Unfortunately, most managers don't know how to make one-to-one conversations meaningful for employees, so their actions are more likely to be interpreted as micromanaging without providing the right tools and direction.

It's not enough for leaders simply to tell managers to own team engagement and coach their people. Leaders must also redefine managers' roles and expectations, and provide training, resources and development needed for them to coach effectively and meet new expectations. Managers also need support to create evaluation practices that will help them accurately measure performance, hold employees accountable and coach them for the future.

High workplace engagement and wellbeing are achievable

When studying best practice organisations, Gallup found their average proportion of engaged employees to be around 65% and increasing annually. And by being in the 90th percentile of Gallup's database, a work unit has a 71% chance of above-average performance relative to other business units. But there are no quick fixes when it comes to human relationships.

It takes a sustained effort to build a truly thriving culture of engagement. And that effort is required right now, given the growing concerns about a global mental health crisis that disproportionately impacts young people.

A study conducted by ICICI Lombard, one of India's largest general insurers, suggested that Gen Z and millennial Indians are far more prone to stress and anxiety than older generations. Further, Gallup's State of the Global Workplace: 2024 report indicates fewer younger workers globally (those below 35 years of age) are thriving compared with older employees 35 or older. These younger workers are more likely to experience loneliness, anger and other negative emotions.

Toxic workplace cultures play a role in causing stress and anxiety. With the ILO reporting that Indians worked an average of over 2,000 hours annually - much higher than U.S., Brazil and Germany - the Indian workforce is at a potentially greater risk of psychosocial hazards which, aside from their impact on employees and the risk they pose to their personal health and wellbeing, can impede the nation's long-term productivity and growth.

Gallup research on employee burnout shows that the way in which employees experience their workload has a greater influence on burnout - and engagement - than total hours worked. Therefore, employee engagement is related less to how many hours an employee works than why they work and whether their workplace environment makes them feel valued and offers an opportunity to contribute to the mission or purpose of the organisation. Engagement also depends on good manager coaching and how well employees feel their manager supports their development journey.

Through strong emphasis on strengthening employees' emotional connections to their organisation, India's leaders can eradicate toxic workplace cultures and build a workforce that is not only productive but also thriving and motivated to make a meaningful difference.

AUTHORS:

Puneet Pratap Singh
Regional Director - Research and Analytics for APAC, Gallup
&
Rashi Singh
Head of Consulting, South Asia, Gallup

*Gallup is a global analytics and advisory firm helping leaders and clients solve their most pressing problems. Combining more than 85 years of experience with its global reach, Gallup knows more about the attitudes and behaviours of employees, customers, students and citizens than any other organisation in the world.

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