A recent survey by the Institute of German Economics (IW Köln) has revealed a correlation between a company’s economic performance and employee sentiment. The study, based on responses from 5,000 employees, indicates that challenging economic conditions are significantly impacting workplace atmosphere.
Employees at companies experiencing economic difficulties rated their workplace climate an average of 3.0, compared to a 2.6 rating from those in companies with a stronger economic outlook. The survey also showed a decline in positive perceptions; only 34% of employees in companies facing crisis situations described the climate as “good” or “very good” down from 53% in companies performing well.
Notably, employee assessments of their relationship with leadership are suffering. Approximately 16% of employees in companies struggling economically rate their collaboration with management as “deficient” or “inadequate” – double the percentage reported in companies with a positive economic trajectory.
According to the IW Köln, this shift can be attributed to the pressures placed on management during challenging times. Leaders may be compelled to make difficult decisions aimed at stabilization and recovery, potentially leading to a refocus on cost management and performance metrics at the expense of employee development and engagement. This change in priorities can create tension between management and staff.
The study also highlights a noticeable shift in interpersonal dynamics among colleagues. While a majority still perceive collaboration positively, the proportion expressing this sentiment is markedly lower in companies facing economic headwinds. Researchers suggest that previously obscured conflicts and competing interests may surface in periods of crisis, when shared successes no longer mask underlying tensions.
The survey, conducted between May 5th and June 2nd, further revealed that one in five respondents anticipate their company facing economic difficulties by 2025.