Leaders are employees, too. Like their teams,leaders also feel the sting of daily businessevents: shriveling market demand, budget cuts,office and plant closures, insolvency, and roundafter round of layoffs in nearly every sector.

Yet, sad to say, leaders also suffer in other ways.Leaders alone face the daunting task of keepingother employees engaged and productive – inspite of non-stop bad news and visceral threatson every side.

Just how challenging is their role?What arethey able – or unable – to do to keep employeesengaged and productive?

AchieveGlobal set out to answer these andrelated questions in a recent survey of 250 lead-ers, from shop floor to C-suite, in a range ofindustries.

Our findings underscore the ferocity of today’seconomic firestorm as well as the practicalways that leaders attempt to deal with theaftermath.

Like a hundred-year forest fire, this global crisisoffers a unique if unwelcome chance to see howleaders perform in the most menacing econo-my in 75 years.

Let’s Get This Straight: It’s BadNo one needs to tell us the recession is wideand deep – but how wide and how deep?

46.8 percent of leaders in our survey say theircompany’s revenue has declined – 22.6 percentsay the decline is “significant” – in the past 9-12months. In response:

• 75.2 percent of companies have cutdiscretionary spending.

• 65.2 percent have stopped hiring.

• 51.2 percent have frozen pay.

• 49.8 percent have laid off employees.

• 20 percent have cut working hours.

• 19.6 percent have reduced employee benefits.

• And 15.2 percent have closed locations.

AbandonAll Hope?In several clear signs of flagging organizationalhope for a quick economic recovery:

• 59.6 percent of leaders predict a hiring freezethrough 2009

• 43.6 percent expect downsizing or layoffsin 2009.

Evenmore unsettling, of leaders whose companyrevenue actually grew in 2008:

• 62 percent report cuts in discretionary spending.

• 55 percent report a hiring freeze – littledifferent from companies whose revenueshrank or remained flat in 2008.

Further, leaders report widespread spendingcuts for employee recognition, training, newprojects, R&D, and innovation.

Sudden ImpactPredictably these depressing trends have adepressing impact on productivity andmorale:

• 21.1 percent of leaders say that productivity hasdecreased in the past 6-12months.

AchieveGlobal SurveyAnalysis: LeadershipinChallengingEconomicTimes

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• 54 percent say that stress is a problem or severe problem for their employees.

• 48.4 percent of leaders say that stress is a problem or severe problem for them.

With similar frequency, leaders report problems or severe prob-lems with employee conflict, turnover, and morale.

Further, in companies with declining revenue, 1 in 4 leaders saythat disengagement is a problem – twice the rate of organizationswith increasing or stable revenue.

When we look at responses by level, we find major deltas betweenmanagers and directors on one hand, and executives on the other.

For example, 14 percent of managers and directors report “pooremployee morale.” Only 5.5 percent of executives report thisproblem.

How should we interpret such differences? Several forces may beat play, including:

• Managers and directors are closer to the front line and more likely to see the symptoms of poor morale and other employee problems.

• For a range of reasons, managers and directors may be reluctant to share this news with executives.

Some Positive SignsNot quite offsetting our gloomier findings, the survey finds a fewpositive trends:

• 51.6 percent of leaders report increased company communication about the local impact of the flailing larger economies.

• 52 percent say that company communication emphasizes opportunities over challenges.

• 66.4 percent say that top leadership is honest with employees about challenges and plans.

More good news: Only about 20 percent say that leadership is lessopen about the company impact of the recession.

But in part due to the severity of the recession, it makes sensethat only 20.4 percent of leaders say that company communica-tion succeeds in answering questions or easing fears.

In addition, this disconnect between the amount and the impact ofcommunication points to weakness in the content, methods, orskills of communication.

What Leaders Do – And Apparently Can’t DoLeaders identify several ways that they try to boost morale and productivity – whether by talent, by training, by hook, or by crook:

• 70.4 percent say they “motivate employees through ongoing, positive communication.”

• 49.2 percent say they “offer special recognition for employees who perform well.”

• 40 percent say they “hold fun events at or away from work.”

• 38 percent say they “offer non-monetary incentives or rewards such as time off.”

• 24 percent say they “offer monetary incentives.”

• 5.6 percent say “my employees don’t need more motivation and their morale is good.”

• And, thank heavens, only 5.2 percent say they “do nothing.”

Still – given serious issues with employee stress, conflict, turnover,morale, and disengagement – we point out that our survey meas-ured the frequency, not the effectiveness, of the leadership skillsand tools listed above.

In particular, we identified at least three areas in which leaderswould clearly benefit from new knowledge and skills:

• While leaders cite positive ccoommmmuunniiccaattiioonn as the top way to motivate employees, low scores on the impact of communication indicate that leaders could be doing a much better job.

• 46 percent of leaders say that rreeccooggnniittiioonn has actually declined in their company – a sad fact when verbal recognition requires no money, just a few skills and the will to use them.

• With pprroodduuccttiivviittyy declining in 21.1 percent of the companiessurveyed, leaders clearly need to rethink priorities, re-assess employee workloads, and retool systems and policies for a smaller workforce.

The Strategic Take-AwayOur survey clearly spotlights the value of continued coaching and development of leaders at all levels, executives no less than supervisors.

Today’s slow-motion global catastrophe in fact drives up the valueof skilled leaders, engaged themselves and able to engage otheremployees in immediately vital work.

While they can’t halt or reverse the course of global events,skilled leaders at all levels can rally employees to protect theorganization until this economic firestorm finally burns itself out.

Developing the !"stcentury workforceTM

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© 2008 AchieveGlobal, Inc. No. M01253 v. 1.0 (4/2009)