By Claire West

According to a new research report from the Economist Intelligence Unit, sponsored by Hay Group, over four in five (84%) top executives in companies across Europe and the Middle East believe “disengaged employees” are one of the three biggest threats facing their business.

Yet almost half (43%) of board directors admit that engagement issues, such as staff motivation, identification with the company goals or willingness to "go the extra mile" for the firm, are “occasionally”, “rarely” or “never” discussed at board level, and only 12% report that their companies “regularly and often” tackle staff with “continually low engagement”.

Nearly half (47%) of C-suite executives believe that they themselves have generated levels of employee engagement in their firm, a view shared by only 16% of senior directors outside the C-suite. The low proportion (13%) of C-suite executives who believe that line managers and middle managers are “chiefly responsible” for staff engagement also contrasts starkly with the views expressed by those outside the C-suite, who believe that it is the “motivational ability of one’s line manager” that determines engagement.

"This research strongly suggests that many, though certainly not all, CEOs retain an unrealistic and over-optimistic view about their own impact when it comes to staff engagement" says Paul Lewis, managing editor of Executive Briefing at the Economist Intelligence Unit and editor of the report.

Other key findings of the study include the following:

· Overall engagement levels are believed to have increased, with 42% believing that workers are more engaged than they were two years ago, with only 23% believing that they are less engaged. This improvement comes in the face of widespread reported salary freezes and lay-offs, and despite levels of stress and pressure greatly increasing.

· Over half of managers in the UK (51%) and the Middle East (46%) are much more likely to report improvements in engagement than their counterparts in France (30%). In addition, almost two-thirds in both the UK and Germany say that they have more engaged staff than their competitors, whereas in Spain only just over one in three agree.

· The research shows overwhelmingly that it is hardest to raise the engagement levels of “experienced and long-serving staff”. However, only 27% of CEOs believe that this group presents the greatest challenge, believing that the under-25s are the most problematic group, in line with the current management orthodoxy surrounding Generation Y.