Trend Study 2023: Companies between limit and healthy high performance

Today's working world is undergoing profound transformations. Crucial megatrends such as digital transformation, new work, and changing values are making their impact on companies. At the same time, global crises, increasing competition and innovation pressure, and a significant shortage of skilled workers are challenging companies more than ever.

25% of surveyed companies are at their limit

The paradigm shifts of recent years are also increasing the pressure on German employers, causing them to increase their pace of work and, in the worst case, pass on the pressure to their employees. Most of these companies are at risk of falling into an "acceleration trap": signs of exhaustion in the workforce are often interpreted as a lack of work motivation, leading to further increased pressure. As a result, there is a pronounced collective exhaustion, with 25% of surveyed companies operating at their limit in 2022.

The study compares so-called "healthy high-performance companies," which are the healthiest and most productive firms, with the currently weakest positioned organizations referred to as "companies at their limit." The findings point to the characteristics that make companies modern and high-performing.

Key findings at a glance:

• Over 80% of employees in companies at their limit do not feel in good health. They experience 11% more absenteeism among their employees compared to healthy high-performance companies.
• The performance of exhausted companies is nearly a quarter lower than that of healthy high-performance organizations. Additionally, they are 18% less productive and experience 13% lower growth.
• Only one-third of employees in companies at their limit are satisfied with their employer. Furthermore, employer attractiveness declines by over 12%.

Study data confirm two extremes

About 15% of companies have successfully mastered disruptive times. "These companies are characterized by their attitude," says Prof. Dr. Heike Bruch, study author and professor of leadership and director at the Institute for Leadership and Human Resource Management (I.FPM-HSG). "They see challenges as an opportunity for change and align their companies accordingly. As a result, they benefit from strong cohesion, positive engagement, and a high sense of purpose among their workforce and within the organization." 

The study data confirm that 75% of healthy high-performance companies are perceived as highly attractive employers by their employees. Additionally, only about 10% of these companies suffer from a shortage of skilled workers.

According to Marvin Neu, study author and research associate at I.FPM-HSG, the situation is different for companies at their limit: "Their everyday work is characterized by collective exhaustion and, at the same time, high resignation among a large part of the employees. They often respond to increased demands with more work and pressure. At the same time, these companies remain stuck in old patterns. While they implement necessary changes such as revised and digitized collaboration, they fail due to outdated leadership and culture." 62% of companies at their limit suffer from a severe shortage of skilled workers, and around 90% of their employees perceive their employer as unattractive.

Main causes of the acceleration trap

The main causes of an acceleration trap include:

• Sense of purpose: Employees often perceive work as meaningful when it aligns with their lifestyle, contributes substantially to known and accepted company goals, and when they receive appreciation in their activities. A high percentage, 75%, of employees in healthy high-performance companies experience this to a great extent. In contrast, only 12% of companies at their limit achieve this level.
• Leadership: Over 75% of healthy high-performance companies established a transformational leadership climate in 2022. In companies at their limit, 67% of employees experience an authoritarian leadership style, often resulting from a leadership vacuum, where employees perceive their leaders less and less.
• Corporate culture: Healthy high-performance companies embody a modern corporate culture, with around 90% practicing diversity management to promote social, cultural, and ethnic diversity. Emotional HR measures additionally strengthen collaboration. Employees also receive targeted development opportunities. In contrast, 80% of companies at their limit exhibit the opposite characteristics.
• Focus on performance: Healthy high-performance companies have managed to keep performance pressure low during challenging times while mobilizing positive energy. While only about 38% of these companies foster a strong performance orientation with management systems, over 75% of companies at their limit do so. In companies at their limit, 91% of employees experience overwhelming performance pressure fueled by performance-centric HR systems.

Information on the study methodology

This "trend study" is intended to serve as a springboard to help companies recognize and deliberately break typical patterns. Especially in disruptive times, it aims to initiate targeted measures and promote healthy high performance. As part of the TOP JOB employer evaluation, zeag GmbH surveyed over 10,000 employees and executives from over 80 German companies. The Institute for Leadership and Human Resource Management (I.FPM-HSG) at the University of St.Gallen created the concept and conducted the evaluation. The result is a representative sample of the German workforce, covering a diverse range of small companies (25%), medium-sized enterprises (44%), and larger companies (31%), with employee numbers ranging from 8 to 2,174. The participating companies primarily come from the service and service industries, as well as the production sector. However, finance, insurance, and real estate companies, as well as companies from wholesale and retail trade and the construction industry, were also included in the survey.

The complete study, practical examples of medium-sized companies, and actionable ideas available at: www.topjob.de

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