As business around the world is increasing, global employee engagement is waning significantly. In fact, in the most recent study of employee engagement levels by Hewitt Associates, the report found that engagement levels at the end of the June 2010 quarter represented the largest decline Hewitt has seen in 15 years.

Not surprisingly, this dramatic drop is due to the growing strain between employers and their employees. Employers are attempting to stabilize their financial situations, and their employees are exhausted after 18 months of stress, insecurity and bewilderment thanks to the effects of the recession and their employers’ actions.

Historically, Hewitt’s research has shown that about half of the 900 organizations polled improved their engagement levels in a one-or-two year period, while 15 percent experienced a decline. However, this year’s study shows more than three times the number of organizations with declining engagement levels, so that in the quarter ending this June, 46 percent of organizations reported falling engagement levels. Only 30 percent improved.

Hewitt’s analysis found an obvious link between employee engagement and financial performance. Organizations with high levels of engagement (65 percent or greater) outperformed the total stock market index and posted total shareholder returns 19 percent higher than the average in 2009. On the other hand, companies with low engagement (40 percent or less) had a total shareholder return that was 44 percent lower than the average.

Hewitt also detailed a number of key factors common to organizations with higher engagement levels and offers the following suggestions:

• Focus on the long term
• Obtain buy-in from leadership for making engagement a top priority
• Implement specific and measurable actions and take steps in areas where the organization will see a clear impact
• Involve all stakeholders and clearly communicate their roles
• Understand and focus on key employee segments and critical talent
• Utilize a broader array of information and analytics
• Strengthen the onboarding process

Expect some enlightened companies to heed this valuable advice and reap the rewards, including higher levels of engagement and a stronger bottom line. Others that ignore these suggestions will have high employee turnover and much lower profits.