Better Pay and Benefits Loom Large in Job Satisfaction

The pick-up in economic growth over the past year has raised employees’ expectations of higher pay and richer benefits, new research by the Society for Human Resource Management (SHRM) and other recent studies show.

As SHRM Online reported (“Survey: Respect at Work Boosts Job Satisfaction”), overall employee satisfaction is at its highest level in 10 years, with 88 percent of employees saying they are satisfied with their job. The findings are from SHRM’s 2016 Employee Job Satisfaction and Engagement survey, conducted in late 2015 and released on April 18. The top three drivers of job satisfaction cited were respectful treatment of employees at all levels, compensation/pay and benefits.

More workers are looking to recoup raises and bonuses missed during the 2008-09 recession and the years of tepid growth that followed—a period also marked by health care premium increases and reductions in employee benefits, the findings suggest.

“Compared with last year, compensation appears to be rising in importance in relation to other factors,” said Evren Esen, director of SHRM’s survey programs. “Many workers over the last decade have been frustrated by stagnant wage growth. Younger workers may be particularly focused on compensation as they pay off college loans and try to establish their savings so they can purchase homes and start families. So while factors such as respectful treatment and trust remain important, compensation is a critical job satisfaction factor—especially among Millennial and Gen X employees.”

This may explain why employees rated compensation/pay the second most important contributor to job satisfaction, jumping from the fourth position in 2014.

When asked about different parts of their compensation package, workers indicated somewhat lower satisfaction levels than for overall job satisfaction:

“Top talent may soon be looking elsewhere for opportunities if they do not feel like they are being adequately rewarded,” noted Christina Lee, SHRM’s researcher for total rewards strategies and project leader of the report.

Benefit Satisfaction

Sixty percent of employees rated benefits as a very important contributor to job satisfaction, keeping benefits in the No. 3 position. But just over two-thirds (68 percent) of employees indicated that they were satisfied with their benefits.

“As the economy continues to improve and job seekers become more confident in securing new positions, organizations must design competitive benefits packages to attract and retain top talent,” said Lee.

Employees responded as shown below when asked how satisfied they were with specific benefits:

SHRM’s comprehensive 2016 Employee Benefits report, which will delve into changes employers are making with their benefit mix, will be released in June at the SHRM 2016 Annual Conference & Exposition in Washington, D.C.

Pay and Benefit Restlessness

Separate research conducted by the nonprofit Employee Benefit Research Institute (EBRI) in Washington, D.C., found that most U.S. workers are satisfied with their employer-provided health coverage, but that there is a long-term trend toward wanting more cash and fewer benefits.

The March 2016 report, Views on Employment-Based Health Benefits, uses data from 2013-15 surveys that EBRI conducted with market researchers at Washington, D.C.-based Greenwald & Associates. Fully one-third of employees would change their current mix of wages and health benefits if they could, the researchers found, which may reflect an intensifying desire for real wage growth.

There appears to be a longer-term trend toward a preference for fewer health benefits and higher wages, the report noted. Between 2012 and 2015, the percentage of workers reporting that they were satisfied with their health benefits fell from 74 percent to 66 percent. At the same time, the percentage reporting that they would rather have fewer health benefits and higher wages doubled, increasing from 10 percent to 20 percent.

“While workers say having a choice of health plans is important and that they would like more choices, most workers express confidence that their employers or unions have selected the best available health plan,” the report said. “Moreover, they are not as confident in their ability to choose the best available plan if their employers or unions did, in fact, stop offering coverage.”

Not Just Pay

While both the SHRM and EBRI studies point to growing interest in higher pay, other findings highlight the close tie between employer recognition and employee job satisfaction.

BambooHR, a software provider based in Lindon, Utah, recently polled more than 1,000 U.S.-based employees and found that simple employee recognition, a higher title (even without a raise) and employee perks are often as effective as higher pay in driving satisfaction. Among the findings reported in the firm’s April report Rewards and Recognition: What’s Really Driving Employee Engagement and Career Advancement:

• 1 in 5 employees—a minority, but not an insignificant number—would prefer to receive a promotion to a higher title even with no raise, as opposed to a 3 percent raise in salary with no promotion to a higher title.

• Nearly one-third of employees would rather be recognized for their work accomplishments in a companywide e-mail from an executive than receive a bonus of $500 that isn’t openly publicized by a superior to their co-workers.

Rusty Lindquist, vice president of human capital management strategy at BambooHR, recently told SHRM Online it’s not surprising money remains workers’ No. 1 choice of reward. “It’s the primary reason most people work, after all. What is surprising, though, is just how much nonmonetary recognition actually means. What our survey showed was that a full 20 percent of employees would actually prefer a title promotion over a 3 percent raise. That means increasing the satisfaction of 20 percent of your company is within reach without ever touching your pocketbook.”

He added, “This is a beacon of hope for many organizations, who simply aren’t in a position to give financial rewards or increased salaries, but who still care a great deal about their employees and want to make them happy.”

In other findings from the BambooHR survey, when asked to rank what signified a career advancement to them, women were more likely to cite “more money” and “a higher title” than their male colleagues. Meanwhile, men ranked “more direct reports,” “expanded responsibility” and “more face time with company executives” higher than women did.

Tellingly, 94 percent of employees who received positive recognition from a supervisor for their performance “daily or more often” were satisfied or very satisfied with their job—a number that progressively declined as recognition decreased.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.