The good news? Overall U.S. employee job satisfaction continues to rank highly at 89 percent. The not-so-good news? There’s a wide gap between those who rate satisfaction with compensation as very important (61 percent) and those who actually feel very satisfied with their current level of compensation (26 percent). This 35 percentage-point difference regarding compensation was the largest gap noted in the 2016 Employee Job Satisfaction and Engagement Survey from the Society for Human Resource Management.
The annual SHRM survey, released recently, "polled 600 randomly selected U.S. employees in December 2016."
The SHRM survey dug deep, examining “44 aspects of job satisfaction and 38 factors directly related to employee engagement.” Survey topics included compensation and benefits, career development, work environment, workplace relationships, and other key HR issues. While compensation emerged as a sore point for many employees, the 89 percent overall job satisfaction rating represents a slight uptick from the 88 percent favorable rating in the 2015 survey and the 86 percent rating in 2014.
Other findings illustrate persistent discrepancies between the satisfaction levels of management versus individual contributors; as well as the tenuous state of company loyalty. In fact, the SHRM survey dovetails with a recent Deloitte study that showed 78 percent of business leaders rating employee retention as important or urgent – even as substantial portions of the workforce appeared ready and willing to find opportunity elsewhere. Further evidence? A recent Monster Worldwide survey that revealed 4 of every 5 respondents had updated their resumes in the previous 6 months; with well over half searching for a new job "all the time" or "frequently."
Respect Matters, But Trust is Lacking
For the third consecutive year, the highest percentage of respondents (65 percent) in the SHRM survey cited respectful treatment of all employees as very important to job satisfaction. Across employee demographic lines, however, wide variances appeared. For example, 15 percent more female than male employees cited respect for all employees as very important. As for actual satisfaction levels, Millennials reported more satisfaction with the overall respect they receive than did their Generation X counterparts (45 percent vs 31 percent). Perhaps not surprisingly, executives reported being very satisfied with the respect shown to all employees by a 21 percent margin over the lower level individual contributors they manage.
Trust in the workplace was another factor the survey explored. Again, a broad discrepancy emerged between employees and senior management. Overall, more than 3 in 5 respondents said trust was very important to job satisfaction while only 1 in 3 reported being very satisfied in this area. What’s more, the importance of trust between employees and senior management as a factor in job satisfaction appears to be trending upward, with a 6 percent increase over the 2015 survey.
The Compensation Satisfaction Gap
That 35 percent gap between those rating compensation satisfaction as important and those actually satisfied with their compensation appears to be a shaky fault line for employers. SHRM reports that one reason for dissatisfaction with compensation could be a recent nine percentage-point drop in the number of workers receiving bonuses. While raises remained consistent with recent years, 40 percent of employees reported being open to seeking external opportunities within the coming year – about half the Monster Worldwide finding, but significant nonetheless. The leading factor in an employee’s decision to stay or go elsewhere according to the SHRM survey? Compensation/pay.
Not surprisingly, employee perspectives on benefits also showed a wide gap between importance as a factor to job satisfaction (56 percent) and actual satisfaction with current level of benefits (31 percent).
To close such gaps in their organizations, employers should survey employees annually on all aspects of compensation and benefit programs to quantify their importance to employees as well as satisfaction levels. With gaps identified, employers can focus their program improvement efforts, improve job satisfaction, and decrease potential turnover.
While SHRM focused on the positive in its reports on the survey, highlighting the nearly 90% of surveyed employees who were at least somewhat satisfied with their jobs, there is clear room for improvement when it comes to compensation and benefits. At least there is opportunity to make sure employees view their compensation and benefits realistically. In a March 23, 2017 Perspectives article, I emphasized the importance of compensation communication to employee loyalty. The SHRM survey would appear to substantiate the problem at the root of this issue. Simply put, with strategic effort toward improving compensation communication and fine tuning total rewards programs, it’s possible for overall job satisfaction to climb still higher. As a result, costs associated with employee turnover, recruiting, and onboarding, should drop.