Low employee engagement and high turnover have persisted for businesses around the world long after what was dubbed the Great Resignation. Around the world, companies are struggling to find ways to meet employee needs.
At the same time, economic uncertainty and unstable markets are causing rifts in the employer and employee relationship. Women and millennials are feeling more disengaged than ever. Yet still, the looming recession and unstable job market are deterring many from quitting their jobs.
If you’re an HR leader, you might feel like you’ve tried everything to increase employee satisfaction. Some organizations have put a keen focus on engaging their current workforce. Others are looking for ways to upskill and reskill their employees to allow for increased career growth. At the end of the day, employee satisfaction is an important ingredient to developing a thriving workforce.
Employee satisfaction is what your team truly needs — they want to feel fulfilled, respected, and excited about their work. If they do, satisfied employees will become more productive, focused, and engaged.
In fact, recent research by Salesforce shows that the employee experience has a direct and substantial impact on an organization’s revenue. Higher levels of employee satisfaction increase customer satisfaction and profitability. It also boosts employee retention.
Let’s dive into what employee satisfaction is, why it matters, and how to measure and improve your team’s job satisfaction.
What is meant by employee satisfaction?
First, let’s understand what we mean by employee satisfaction.
An employee’s satisfaction can be impacted by a wide variety of factors including work environment, relationships with coworkers, and employee benefits and perks (or lack thereof).
Employee satisfaction vs. employee engagement
People sometimes use employee satisfaction and employee engagement interchangeably. These two factors do have an impact on each other, but when you break them down, there are some important differences.
Employee engagement measures how engaged an employee is in their specific job duties. Because of this, you can directly tie it back to performance, productivity, and output. If there’s a problem with a team member’s engagement, you might be able to fix it by adjusting their responsibilities, giving them a new project, or offering growth opportunities.
On the other hand, employee satisfaction is more holistic. There are dozens of factors that can impact satisfaction. For example, you could be highly engaged with your work, but frustrated with your compensation and the company’s culture.
That said, a lack of engagement can sometimes come from low satisfaction (and vice versa). Sometimes, to boost these metrics, you’ll need to address both through a combination of tactics. Offering an employee a raise and a new role in a different department, for example, can have a very positive effect (as long as the new role is aligned with their goals).
Why is employee satisfaction important?
Employee satisfaction is important because it directly impacts a company’s bottom line. When employees are happy, they’re more productive and engaged. Plus, they do better work. Ultimately, this improves the customer experience and helps the business thrive.
High satisfaction is also shown to reduce employee turnover. This can reduce expensive hiring costs and boost a company’s performance. Instead of constantly training new employees, team members can focus on their work and its results, plus find more opportunities to collaborate.
What are the 5 elements of employee satisfaction?
As we’ve mentioned above, employee satisfaction is unique because it’s about a worker’s holistic experience, not just their day-to-day duties. The good news is this experience can be broken down into the 5 main elements that make up employee satisfaction:
Positive company culture
1. Meaningful work
When employees connect on a deeper level to work, you can it in their results. They’ll provide a better experience to customers, be more resilient to challenges, and stay more focused.
Ultimately, that’s good for employee well-being, retention, and the bottom line.
2. Positive company culture
Workplace culture should cultivate respect, belonging, and inclusivity. Unfortunately, according to Gallup, the number one cause of employee dissatisfaction is “unfair treatment at work.”
Too many workers feel like they’re not being fully recognized or respected for their contributions. Over time, that can drastically reduce satisfaction and lead employees to disengage from their work.
3. Fair compensation
Two-thirds of employees report being unhappy with their wages. Unfortunately, that’s why so many employees leave — a new job is the quickest way to get a salary bump.
This is why employee satisfaction is so important: even if you can’t give all of your employees a massive raise, you can focus on the other factors that impact happiness. Organizations should constantly examine (and re-examine) their compensation ranges to stay competitive in the current market.
4. Work-life balance
Even though compensation plays a role in employee satisfaction, work-life balance matters more for many people.
In fact, during the COVID-19 pandemic, one-third of job switchers took a pay cut in order to have a better work-life balance. If an organization demands frequent overtime or has a strict policy against remote work, it will likely struggle with employee satisfaction and retention.
5. Career growth opportunities
When employees don’t have the opportunity to improve their skills or take on new challenges, they’ll be more likely to leave.
That’s why growth opportunities can have a big impact on employee satisfaction, whether it’s career development programs, coaching, mentorship, or something else entirely.
3 ways to measure employee satisfaction
Before you can improve employee satisfaction, you need to understand where you’re starting. From there, you can set realistic goals and track your progress. Before you know it, you’ll be gaining all the benefits of a satisfied workforce.
Here are three easy ways to measure employee satisfaction.
1. Send an employee satisfaction survey
Not to be confused with an employee engagement survey, this questionnaire should explore how content (or discontent) your team is with their overall experience. That said, engagement tools can be helpful for creating and sending your survey.
Once you have a method for sending it out, you’ll want to include questions about the following topics in an employee satisfaction survey:
2. Make performance reviews mutual
Performance reviews are an excellent way to learn how satisfied your employees are. Reviews should never be one-sided. Instead, managers should be responsible for asking their team questions about employee satisfaction.
This will give employees an opportunity to share how they truly feel about their job, their pay, how much they’re working, and any other factors affecting their overall happiness.
3. Regularly ask for employee feedback
As wonderful as performance reviews and employee satisfaction surveys are, these tactics can only be used a few times a year. In order to truly understand how your team feels, you’ll need a more regular cadence for feedback.
For example, you could send employees a short survey once a month. The questions can be as simple as, “on a scale of 1-10, how satisfied are you with your employee experience?” This will give you a solid metric to track each month. That way, if things start to go downhill, you can make adjustments quickly.
How to improve employee satisfaction
Now that you have some employee feedback in hand, what can you do to improve employee satisfaction? In an ideal world, you could give everyone a raise and fulfill your team’s every wish.
However, in the real world, things aren’t quite so easy. The good news is that since employee satisfaction is holistic, you can implement a wide range of methods to boost overall happiness.
Here are 6 tips for improving employee satisfaction:
Foster a sense of purpose
Build a high-engagement culture
Take feedback seriously
Improve relationships with management
Make employees feel heard and seen
1. Foster a sense of purpose
According to research by McKinsey and Company, employees expect their jobs to bring a “significant sense of purpose” to their lives. Even more interesting? Life and work outcomes were two-to-five times higher for employees who found work fulfilling.
If you want to boost employee satisfaction, the purpose might just be the missing puzzle piece. So how do you accomplish such a vague objective? Here are a few tips:
Focus on refining what’s in your control — specifically, the company’s mission, purpose, and values
Communicate these three things consistently and often
Foster conversation on this topic, whether it’s informally at the lunch table or through organization-wide panel discussions on Zoom
Make purpose a core part of the hiring process so that you bring on employees who are aligned with your mission
2. Build a high-engagement culture
As we said earlier, engagement and satisfaction are not one and the same. However, engaged employees are more likely to be satisfied, so creating an engaging culture will support your efforts.
According to research from Gallup, there are a few factors that help great organizations build an engaged workforce:
Leaders are committed to engagement, understanding that results won’t happen overnight
Engagement starts at the top and trickles down from there
Communication is open and consistent
Developing and hiring great managers is a priority
When employees know that leaders share their priorities and communicate with transparency, it creates more motivation to be engaged. And ultimately, that can help boost employee satisfaction.
3. Take feedback seriously
Unfortunately, too many companies receive survey results and immediately file them away. Instead, they need to focus on taking action. Workers know when their employers don’t care — in fact, less than 25% of Americans believe their bosses have their best interests at heart.
If you want to improve employee satisfaction, it’s important to find ways to implement feedback. Of course, not every employee request can be fulfilled. However, consider ways to recognize and respond to complaints, whether it’s through an email, company-wide meeting, or another channel.
4. Make employees feel heard and seen
According to a global study, 74% of employees feel more effective in their jobs when they also feel heard. Whether it’s their complaints about the benefits package or a new product idea, employee satisfaction will improve when you listen to your workforce.
Here are a few ways to create a culture of listening:
Hold a regular brainstorming session where employees from different departments can share ideas to improve your product or service
Similarly, create a form where employees can share this kind of feedback on a regular basis — just make sure someone is responsible for reviewing it
Ask managers to encourage participation in meetings by calling on people who haven’t spoken or asking a question that everyone gets a chance to answer
Build coaching skills and foster a culture of coaching within your organization
5. Improve relationships with management
A bad manager is the quickest way to become dissatisfied with your employee experience. If managers aren’t trained in communication, delegation, and other essential people management skills, employee retention and motivation will suffer.
To prevent this, it’s best to create an ongoing training program for managers. Have them participate in professional development quarterly or monthly. You can also regularly remind leaders of good management practices, like having one-on-one meetings with their team members.
Leadership trust is also a crucial factor in employee satisfaction. If you teach managers to be consistent, fair, transparent, and competent, your workforce will be more likely to develop positive relationships with them.
6. Be flexible
Finally, flexibility is one of the most important factors for employee satisfaction. Your workforce is human, after all — and they’re more stressed than ever. Flexible policies can help prevent burnout, support work-life balance, and boost overall happiness.
Here are a few ways to offer more flexibility in your workplace:
Location: Unless being in-person is essential to the business’s operations, give your employees plenty of options for where to work. For example, offer a coworking membership stipend if your whole workforce is remote, or let your employees work from home a few days a week if you have an office space.
Hours: Don’t obsess over when employees clock in and out. Let working parents pick their kids up from school and commuters come in after the rush hour.
Job responsibilities: Some of your employees might still be figuring out their purpose. Think about how you can create programs that allow them to try out different types of work. Ultimately, this will allow you to keep a great hire while letting your employees find work that’s meaningful to them.
Moving forward with employee satisfaction
Employee satisfaction is foundational to all the other metrics that HR leaders care about. If you’ve been focusing on retention, engagement, and motivation for too long, employee happiness could be the missing piece to your strategy.
Remember: employee satisfaction is holistic. The best way to make improvements is to ask your employees what they need, make them feel heard, and then take concrete steps to address concerns.