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Gallup, UBS Launch New Employee Index

by Dennis Jacobe

Building on the heralded success of the Gallup/UBS Index of Investor Optimism for U.S. and EU economies, Gallup and UBS have again joined forces to measure the critical issue of employee confidence in the companies where they work.

To generate an ongoing measure of employee confidence, each month a nationally representative sample of employees will be asked their views across three dimensions; Current Company Finances -- where employees rate the current financial situation at their company, Future Company Performance -- where employees rate their company's short-term financial and growth situations, and then finally Job Security -- where employees rate their current job prospects at their company and in the U.S. economy overall. In the first survey for the Index, the Current Company Finances Dimension of the new Index stands at 83, the Future Company Performance Dimension stands at 80, and the Job Security Dimension stands at 52. Combining the dimensions, a baseline measure of 72 was established for the month of April for the Gallup/UBS Employee Outlook Index.

Initial findings for the new Employee Outlook Index generated a few valuable insights:

  • Despite concerns among investors and the general public about the people who run this nation's companies, the overwhelming majority of the employees at U.S. companies still have a great deal of trust/confidence in their corporate leaders. (See "Do Employees Trust Their Employers?" in Related Items.)
  • The results of the Employee Outlook Index for April reflect the first quarter strength of the U.S. economy -- 79% of employees saying the financial situations at their companies are good/excellent and 76 % say they are getting better. But the findings also reflect profit/growth concerns in the U.S. business community, as fewer employees say they are very/extremely confident that their companies will grow (52%) and be profitable (64%) during the next six months.

The driving force behind the development of the Employee Outlook Index is our belief that employees can provide key insights into the U.S. economy.

  • Employees have more knowledge about their companies than the general public.
  • Employees are among the first to know when their companies are "on a roll" or facing significant difficulties.
  • Individual employee perceptions often reflect those of the overall workforce at the companies where they work.
  • Employees are often the most knowledgeable investors in their own companies.
  • Though employees, like investors and the general public, can be misinformed about their companies' financial situations, they are often the first to either gain or lose confidence in companies.

We also believe that employees are the key to their companies' significant productivity gains.

  • Employee attitudes and perceptions often reflect the productivity of a company's workforce.
  • When a company has the confidence of its employees, it can make great gains and help push the economy forward.
  • When a company loses the confidence of its employees, it can lose its productivity and slow the economy.

In sum, Gallup believes that the Employee Outlook Index, which reflects the combined employee confidence of the nation's private-sector-for-profit companies, will become a key indicator of the short- and long-term prospects of the U.S. economy.

Only employees of private-sector-for-profit companies having five or more employees are included in the survey. In addition to the core questions used to calculate the Index itself, respondents are asked a number of varying explanatory and topic questions to be reported on concurrently with each new Index figure.


Gallup https://news.gallup.com/poll/5962/gallup-ubs-launch-new-employee-index.aspx
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