Pay and Benefits Concerns Linked to Job Dissatisfaction

Half of all U.S. employees are not happy. That message comes through in Mercer’s What’s Working survey, conducted among 2,400 workers in the U.S. in late 2010. Survey findings were released in June 2011.

Nearly one in three (32 percent) U.S. workers was seriously considering leaving his or her organization, up sharply from 23 percent in 2005. Meanwhile, 21 percent were not looking to leave but viewed their employers unfavorably and had rock-bottom scores on key measures of engagement, reflecting diminished loyalty, commitment and motivation.

“The business consequences of this erosion in employee sentiment are significant, and clearly the issue goes far beyond retention,” said Mindy Fox, a senior partner at Mercer and the firm’s U.S. region leader. “Diminished loyalty and widespread apathy can undermine business performance, particularly as companies increasingly look to their workforces to drive productivity gains and spur innovation.”

Disappointed over Rewards

Employee concerns about work were pervasive, reflecting an evolving employment deal that they have seen as a series of takeaways plus further cuts made during economic tough times:

• Only 43 percent of U.S. employees believed they were doing enough to financially prepare for retirement—down from 47 percent in 2005, and just 41 percent believed their employers were doing enough to help them prepare, up slightly from 38 percent.

• Just 68 percent of employees rated their overall benefits program as good or very good, down from 76 percent in 2005, while 59 percent said they were satisfied with their health care benefits, down from 66 percent.

• Base pay was the most important element of the employment deal by a wide margin, but U.S. workers showed lower satisfaction with base pay (53 percent satisfied, down from 58 percent in 2005).

• Despite improvements, scores for career development and performance management remained low. Just 42 percent of employees agreed that promotions went to the most qualified employees in their organization, up from 29 percent in 2005, and 46 percent agreed that their organization did an adequate job of matching pay to performance, up from 33 percent.

Overall scores were down consistently across key engagement measures while intention to leave was up across all employee segments, with the youngest workers most likely to be eyeing a departure—40 percent of employees age 25-34 and 44 percent of employees 24 and younger.

Communicating the Deal

According to Mercer's Fox, an effective employment deal includes how the deal is defined and how it is delivered. “Employees see a ‘disconnect’ between what employers are promising and what they are delivering,” she said. “Organizations should re-examine their deals—both the traditional and nontraditional elements—then support them with effective administration and consistent, authentic communication that fosters a sense of belonging and helps employees make better rewards choices and career decisions.”

Added Jason Jeffay, a senior partner and global leader of Mercer’s talent management consulting, “Without question, employers face significant challenges in raising engagement but they can be overcome by making the right trade-offs and investments in the employment deal while enhancing leadership skills and managerial effectiveness on the front line.”

The findings drive home the importance of knowing what is going on inside employee minds, which changes over time. “Often, a change in mood or sentiment is not spotted until it becomes a full-blown issue,” said Pete Foley, a principal at Mercer and employee research consultant. “Employers must periodically take the pulse of their own employees to identify their specific areas of concern and link employee opinion to outcomes such as productivity and retention.”

Stephen Miller, CEBS,is an online editor/manager for SHRM.

Related Articles:

Nonfinancial Factors Seen as Key to Improving Motivation, SHRM Online Benefits Discipline, October 2011

Retirement Plans Play Key Role in Talent Management Strategies, SHRM Online Benefits Discipline, June 2011

Moderate Economic Growth, Slow Job Market, Say CFOs, SHRM Online Compensation Discipline, June 2011

2011 Median Pay Increase Budgets Are 3%, SHRM Online Compensation Discipline, May 2011

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