Job satisfaction is a term we hear often, but do you know its exact definition, and how its absence could be bringing down your company’s productivity? Read our definitive guide on job satisfaction, its drivers, and its benefits for 2020, and how your organization can benefit from increased satisfaction in the workplace.
These are exciting times for workplaces, with business demands growing steadily and employers working hard to keep their workforce satisfied. A 2019 survey by The Conference Board (U.S.)Opens a new window found that job satisfaction is now at its highest in 20 years. So, how does this impact your company? First, you need to know precisely what job satisfaction is and how you can measure it accurately for 2020 and beyond.
Table of Contents
- What Is Job Satisfaction?
- 10 Factors that Determine Your Employees’ Satisfaction Levels
- 5 Reasons Why Job Satisfaction Is so Important
- Trends and Statistics Suggesting Employee Satisfaction Is on the Rise
- The Next Step? Learn From These Two Exemplary Companies
What Is Job Satisfaction?
Job satisfaction, an unquantifiable metric, is defined as a positive emotional response you experience when doing your job or when you are present at work. Leading organizations are now trying to measure this feeling, with job satisfaction surveys becoming a staple at most workplaces.
It’s important to remember that job satisfaction varies from employee to employee. In the same workplace under the same conditions, the factors that help one employee feel good about their job may not apply to another employee. For this reason, it is essential to have a multidimensional approach to employee satisfaction, covering the following areas:
- The challenging nature of work, pushing employees to new heights
- A level of convenience (short commutes, access to the right digital tools, and flexible hours)
- Regular appreciation by the immediate management and the organization as a whole
- Competitive pay, which employees maintain a good quality of life
- The promise of career progression in sync with employees’ personal growth targets
10 Factors That Determine Your Employees’ Satisfaction Levels
There’s no one definition of job satisfaction, and factors contributing to it will depend on the nature of your workplace. For example, a satisfied employee in the manufacturing sector looks different from a satisfied software developer. However, there are ten traits that every workplace geared toward employee well-being and satisfaction will have in common.
Fig 1. The 10 drivers of job satisfaction
1. Does your company care about its employees?
Remember, it’s not enough to only care – communicate this care regularly to employees through newsletters, rewards, informal recognition, paid incentives, and other forms of communication.
Companies with a high job satisfaction level, such as Google and Starbucks, also feature employee happiness and satisfaction stories as part of their communication strategy.
2. Does the workplace have room for employees to engage in their hobbies?
Today, most of us spend a significant part of the week at work, but this doesn’t mean we want to ignore our hobbies or personal interests.
A workplace where employees have enough free time to read a book, catch up on the news, have a pleasant meal, for example – and where such behaviors are not considered slacking off – will better enable job satisfaction.
3. What is the average interval between promotions?
The current business environment is fast-paced, and employees will switch to greener pastures if promotions aren’t forthcoming.
A good rule of thumb is to keep the interval between employee promotions below the average employee tenure. For example, if employees stay with your company for five years and two months on average, promotions should be scheduled at least at two-year intervals. If such transitions aren’t possible, provide cross-training programs to give every employee a chance to explore new roles in the organization.
More importantly, inform your employees about the promotion policies in your organization so they know what to expect and when to expect it.
4. Do employees feel respected by their peers?
A workplace where employees feel regularly criticized or under some type of scrutiny is ripe for dissatisfaction. You can detect their dissatisfaction via one-on-one conversations with employees, or through anonymized data collected via employee satisfaction surveys and then take appropriate measures to improve their experience in this area.
5. Is there a culture of two-way feedback?
Employees need regular feedback (both positive and constructive) to know that they are on the right track.
Also, they want to share their opinions with managers/HR/senior management to guide the future of the company. This culture of two-way feedback is essential to maintaining employee satisfaction. It is doubly necessary for you to act on the feedback you receive.
6. Where do you stand on the issue of work-life balance?
Companies must try to build a non-toxic culture of high performance, where productivity isn’t prioritized over well-being. Positive work-life balance is integral to this.
As per the 2019 Workplace Happiness Report by UdemyOpens a new window , work-life balance adds meaning to the job for 37% of professionals. Mandatory work-from-home days, paid time off, and flexible working benefits are great ways to help employees achieve this.
7. How do employees rate their relationships with their reporting heads?
We have all heard the axiom that employees don’t quit jobs, they quit bosses. And this is confirmed by studies – a poll by Gallup found that 75% of voluntary attrition can be attributed to the behavior of immediate supervisors and not the job itself.
Again, targeted job satisfaction surveys (implemented on a team-by-team basis) can help root this out.
8. Does your organization follow fair and inclusive policies?
Diversity and inclusion in the workplace have a positive impact on the business bottom line, while also improving a company’s culture and work environment. By ensuring fairness toward all your employees, regardless of age, gender, or disability, you can increase the average level of satisfaction across the company.
In other words, job satisfaction shouldn’t be limited to a select few – everyone, across the company, should experience the same level of well-being.
9. Can employees nurture their creative instincts in their jobs?
While this depends on your specific industry of operation, employees mustn’t be stifled when showing a spirit of creativity in their jobs.
In fact, learning and development programs can be deployed to strengthen creative skills, making your company more innovation-friendly. Otherwise, you risk having a workforce that feels unheard, with the same rules imposed upon them over and over again.
10. Do employees feel secure about their role?
Job security is now a major concern as technology upends existing processes, and automation threatens legacy models of working. As a future-focused employer, you must clearly explain how an employee’s role will transform over the years and equip them for this change.
Employees shouldn’t feel insecure about their jobs – you can ensure this by maintaining a consistent line of communication between frontline employees and senior leadership.
Apart from basics such as compensation, employee benefits, and workplace amenities, these ten factors go a long way in either improving or negatively impacting employee satisfaction. And here’s why you can’t afford to have dissatisfied employees.
Learn More: Employee Engagement vs. Job Satisfaction: Key Differences and MetricsOpens a new window
5 Reasons Why Job Satisfaction Is so Important
By actively working on satisfaction in the workplace, you end up with employees who are more engaged, involved, and eager to go the extra mile. This benefits your company in several ways.
Fig 2. Why measuring job satisfaction is essential
1. Satisfied employees translate into satisfied customers
If employees are unhappy at work, the chances are that this will reflect in their interactions with the customer. Contact centers, specifically, cannot afford to have dissatisfied employees – this is sure to show in every word they say and every campaign they work on.
Even in non-customer-facing jobs, low satisfaction can cause errors in the workflow – for example, a higher defect rate in manufacturing and bad code in software development. This is why employee satisfaction is vital for customer-centric companies.
2. Voluntary turnover will come down
Sometimes, turnover can be good for business, as it brings fresh talent into the organization. But voluntary turnover looks different – you risk losing top talent you have carefully trained over the years.
Also, this talent takes with it tribal knowledge once it leaves the company, which could toughen up the competition for your products and service offerings. On the other hand, a satisfied workforce is less likely to quit.
3. You increase the chances of referrals
Employee referrals are the most effective method of recruitment, bar none. A report by JobviteOpens a new window found that referrals make up 7% of all applications but an overwhelming 40% of all hires. An employee satisfied with the work conditions and the pay scale is far more likely to recommend their friends than a dissatisfied employee.
Non-compensation related factors make up a big part of this benefit, as employees will assess multiple factors before recommending someone else.
4. Satisfaction is directly linked to your productivity
In a positive work environment, employees are more likely to bring their best to work every day. For example, research by the Social Market Foundation and the University of Warwick’s Centre for Competitive Advantage in the Global Economy (CAGE)Opens a new window found that happy employees are 20% more productive than unhappy employees on average!
There’s also a secondary reason for this – high-satisfaction workplaces prioritize employee wellness. Therefore, they are more likely to look after themselves, and address stress/burnout/health issues, before it impacts work.
5. In the long term, you can dramatically reduce HR costs
Typically, you need to plan for both fixed and variable costs as part of your HR budget. Low satisfaction could significantly dent the variable aspect of this equation – dissatisfied employees require targeted surveys, specialized learning and development, additional career assistance, and ultimately may lead to rehiring and retraining costs in the case of turnover. All of this needs you to invest more than you had expected.
By making job satisfaction a priority at your company, you can stay ahead of the curve and ensure that there are no unprecedented issues arising due to low satisfaction.
Driven by these benefits, more and more organizations are investing in job satisfaction initiatives. And this has had a marked impact on job satisfaction, as seen in the following statistics.
Trends and Statistics Suggesting Employee Satisfaction Is on the Rise
Looking at job satisfaction statistics reveals a mixed bag of sorts. On average, there’s an upward curve, as most employees are happy with where they work. But there are also clear problem areas. Take a look at these numbers from The Conference BoardOpens a new window and UdemyOpens a new window to understand exactly what we are talking about:
- 54% of respondents say that they are satisfied, as per the Conference Board’s survey of approximately 2,000 U.S. employees. This is the highest that we have seen in the last two decades. Contributing factors include better commutes, the physical environment, job security, one’s colleagues, and the nature of the work itself.
- A staggering 84% of millennials are currently employed at their “dream job,†found Udemy’s survey of 1,000+ full-time U.S employees. 54% of baby boomers agree. Overall, millennials are happy with the flexibility of their schedules, remote work facilities, and investments made by employers in their career development.
- Your company’s missionOpens a new window matters in the case of employee satisfaction. 62% of employees across various generations would be okay with a pay cut if their prospective employer had a mission in sync with their personal values, found Udemy.
- In both reports, there is a visible difference in job satisfaction between men and women. Conference Board’s survey found that work-life balance, communication, and the people at work have a more significant impact on female workers. On the other hand, men are more likely to find satisfaction in financial drivers.
- Udemy’s survey confirmed that job satisfaction statistics were skewed in favor of men. There was at least a 10 percentage-point difference between satisfaction with remote working, flexible schedules, and investments in employee development.
So, what do these statistics tell us? To begin with, companies seem to be moving in the right direction, identifying the most important factors for employee satisfaction. Next, millennials seem to be benefiting the most from this trend. However, satisfaction drivers among varied demographics need to be examined to ensure an inclusive strategy for employee well-being.
The Next Step? Learn From These Two Exemplary Companies
Remember, there’s no one-size-fits-all model when it comes to ensuring job satisfaction for your entire workforce. In addition to the factors we listed, you can gain inspiration from companies that made this metric a priority:
1. Amazon is known as a dynamic company that demands high productivity from its workers. The company has focused on employee job satisfaction as a critical lever for providing customer-centric services. A two-year study of 1,045 U.S. Amazon employees found that Amazon exceeds the national average for 12 parameters of job satisfaction, in gender equality, diversity, and workplace safety. The data was analyzed by Austria-based employer rating company, Kununu, and reported by ObserverOpens a new window .
2. Like Amazon, Apple also prioritizes employee job satisfaction as a key component for success. Indeed studied thousands of job reviews across U.K.’s tech companies to analyze the state of employee satisfaction. Apple emerged as the leader in terms of employee satisfaction, followed by the GDS Group, Cisco, and Microsoft, as reported by CNBCOpens a new window . Good pay, discounted products, health and wellness benefits, and the company culture were the primary reasons for Apple’s high satisfaction scores.
While providing employees privileges as Amazon and Apple do may not be possible for every company, examples like these can lead you in a direction that allows you to first focus on the importance of job satisfaction and then use the necessary measures to improve it at work.
Equipped with the definition of job satisfaction, key factors influencing it, and statistics to benchmark your company’s performance, you can now kickstart the crucial initiatives to improve satisfaction in the new year. Make sure that you do your research, measure against the ten factors we mentioned, and take employees’ individual goals into account.
How is your company doing on the job satisfaction index? Tell us on FacebookOpens a new window , LinkedInOpens a new window , or TwitterOpens a new window . We are eager to hear about your insights!