Job satisfaction directly correlates to employee retention, engagement, and performance.
In other words, worker satisfaction = business success.
But many employers assume employees’ satisfaction revolves around their paycheck.
According to Glassdoor’s employee satisfaction survey, the three most important job satisfaction factors are:
Company culture and values
Quality of senior leadership
Business outlook and work-life balance rank below these three factors.
You can’t compensate for a poor workplace by just paying more. No matter their salary, an employee won’t stay at a workplace that fails to support their need for positive support and growth.
In this article, we’ll discuss six job satisfaction factors, paying special attention to company culture and why it’s the number one satisfaction factor for many workers.
The short answer is no, it’s not.
Salary’s impact on job satisfaction is relatively small – it definitely influences overall satisfaction but not as much as you might assume.
One Glassdoor study showed that salary has a small impact on satisfaction, and there are diminishing returns with every pay increase.
However, this 2015 study only looked at US workers.
So in 2019, Glassdoor widened its research efforts and discovered that in the US, France, Germany, Canada, and the UK, the compensation and benefits of a role ranked in the bottom three priorities.
From this, we can deduce that employee job satisfaction depends on many other factors. No matter how much you pay, your workers need a solid workplace culture, reasonable working hours, and support to thrive.
It’s telling that almost 50% of workers would take a reasonable pay cut to have better control of their schedules, and 60% of Americans would work a job they loved that paid half their current income rather than a job they hated that paid double their current income.
Ideal working conditions aren’t strictly tied to salary and are greatly impacted by the work environment, opportunities for career growth, and leadership and support.
Let’s get right into it.
Let’s address the next question we’re all thinking about: “If pay isn’t the be-all and end-all, what job satisfaction factors actually matter to my employees, and what do they look like in action?”
Let’s describe each factor, its overall contribution to satisfaction, and how to know if your organization has it.
Here’s a summary for quick reading:
1. Company culture
A combination of work environment, behavior, values, and attitudes impacts workers’ satisfaction
2. Career opportunities
Employees are more satisfied when they are given opportunities to learn, grow, and achieve their career goals
3. Senior leadership
Leaders who are helpful and supportive and not just “bosses” increase job satisfaction
4. Work-life balance
Workers are more satisfied when they can balance the demands of their work and personal lives
5. Business outlook
The future of the organization and where it stands in the industry affect job satisfaction
The years of experience one has in a field effect employees’ happiness and engagement
We’ll start with the number one factor: organizational culture.
Company culture is a big topic right now – and for a good reason.
Workers are submersed in company culture every day. Work environment, employee behavior, and company policies all contribute to an organization’s overarching culture.
Here are a few important elements that factor into company culture:
According to the Glassdoor survey we cited above, culture and values typically ranked number one on average across country, industry, and gender. (It only ranked second in Germany and the nonprofit industry.)
Interestingly, more organizations have also been prioritizing culture in their recruitment process by hiring for culture add over culture fit.
Culture add means incorporating diverse thoughts and practices into your company culture.
It’s certainly more meaningful than the outdated “beer test” – hiring people with whom you’d feel comfortable going to the pub.
Just as a puzzle isn’t made whole with 500 of the same piece, a thriving workplace depends on the combined values, goals, attitudes, and practices of the people working there.
Employees and job seekers place a lot of value on culture, so it’s critical to display your culture to candidates through your website or recruitment email marketing.
Company values, beliefs, and goals are at the forefront of a job seeker’s mind, so you can display your organization’s attitude with an ongoing email marketing campaign that gradually builds a trusting relationship.
You can then up the ante by sending out specific messages describing your culture, your employees, and what it’s like to work at your business.
Building a good relationship with candidates is easier when you personalize the emails you send. Personalizing emails displays a key part of your culture: Potential candidates are more than just a number, and you want to put in the effort to connect with them.
Bonus: Learn how to personalize recruitment emails for your next hiring campaign.
Proudly wearing your culture on your sleeve gives you a better chance of attracting the right people and convincing them to pick your company over other positions they may be considering.
If candidates know your culture, attitude, and practices up front, they’re more likely to stay satisfied, and you’re more likely to reduce voluntary turnover.
From 2015 to 2016, voluntary turnover rates ranged from 60% to 70% in most industries.
However, a 2021 study found that voluntary turnover was at just 25%.
We believe this rapid change is due to the rising trends of promoting company culture and hiring for culture add.
A good example is Continental, a food management organization that needed to address low job satisfaction and high turnover.
The company’s first attempt at a solution was raising pay rates – and it didn’t work. Increasing pay simply motivated its competitors to do the same. This drove Continental’s rates up and still didn’t successfully engage and stabilize its team.
So what did the business do? It asked its people what they wanted.
Through the combined ideas and efforts of the employees, HR, and operational leaders, the company overhauled employee rewards, production gamification, manager training, food services, and more.
It actively involved its employees in improving work culture, significantly reducing turnover and making employees feel appreciated and heard.
Focusing on your company culture is one of the critical aspects of maintaining a healthy work environment. It boosts current employees’ job satisfaction and attracts top talent looking for a stellar workplace.
Many employees care deeply about career opportunities, growth, and development. The best workers have a thirst for learning new skills, reaching new peaks, and getting to new places in their careers.
In the Glassdoor survey, career opportunities ranked among the top three job satisfaction factors in every category.
Offering learning and upskilling opportunities for employees shows that your business supports its workers and wants them to achieve their goals and be the best they can be. Furthermore, this helps your organization attract new skilled workers.
Leadership and development perks also boost retention. LinkedIn’s 2022 Workplace Learning Report showed that organizations that excel at internal mobility are twice as likely to retain employees.
The same study also showed that workers who feel their skills aren’t being used to the fullest are 10 times more likely to look for a new job.
Phenom, an HR technology company, is a great example of how to support employee career development.
Lauren Berkel, an employee at Phenom, went from being a sales development rep to a member of the HR team to her current role as a talent experience specialist in about one year.
She says that the company clearly stated throughout the hiring process that the position was great for growth and professional development – and not only in the sales department. They made it clear that evolution and growth are par for the course at their organization.
Berkel then found an HR role in her company’s internal talent marketplacehttps://www.testgorilla.com/blog/support-working-parents/ and was encouraged to apply.
The organization now has a satisfied, high-performing HR professional instead of a somewhat engaged, somewhat satisfied sales development representative.
Phenom did the following things right:
Advocating internal mobility and career opportunities, allowing for transparency and honest discussions about career growth
Clarifying throughout the entire hiring process that growth and development were not only possible but encouraged
Advocating career growth and displaying this as part of your brand on your website and throughout the hiring process starts your relationship right and attracts compatible talent.
A great boss can lead and coach their team members to improve their performance and quality of work, but it isn’t all about results. Excellent leaders also boost satisfaction and engagement.
The quality of senior management is crucial to the happiness and success of those they lead.
In Glassdoor’s survey, senior leadership ranked number two in every category, apart from Germany and the nonprofit industry, where it ranked number one.
The best bosses are those who:
Lead by example
Treat their workers with respect
Recognize employees’ strengths and weaknesses
Great senior leadership happens when a workforce doesn’t just work for a leader but wants to work for a leader.
According to an extensive study of 38,000 workers by the National Bureau of Economic Research, employees’ happiness and job satisfaction were much higher when they had a close partnership with a leader versus a traditional “boss” relationship.
These results were consistent across every age group.
It isn’t surprising that leadership plays a large role in employee satisfaction in the workplace. Your employees engage with leaders often when starting projects, reporting progress, and solving problems.
All of that takes up a significant amount of the workweek, so a pleasant, encouraging leader contributes a lot to the work atmosphere.
You can improve your employees’ relationship with senior leaders by implementing regular 1:1 meetings in your organization.
These meetings nurture work relationships and are a great way to improve the quality of your senior leadership.
Holding 1:1 meetings every one to two weeks gives workers frequent opportunities to:
Discuss important topics like goals and growth
Report problems before they become serious issues
Employees’ ability to balance the demands of personal life and work is one of the most cited factors that affect their satisfaction.
Although work-life balance is a popular topic, it ranked relatively low in Glassdoor’s survey. This was especially the case in the government sector, which Glassdoor believes is due to government workers already having a good work-life balance.
The survey also showed that work-life balance matters slightly more to women than men.
Although it’s a lower priority than the other factors, work-life balance is still important and contributes to overall well-being.
Creating a clear balance and boundary between work and personal life matters to every employee on some level, but it’s critical for a few demographics, such as:
People with multiple jobs
People with alternative lifestyles
What about working parents?
Managing a job while taking care of a child can be a stressful, hectic situation, and a proper work-life balance is confusing and hard to achieve.
Implementing a flexible working policy in your business is a great way to provide a simpler work-life balance for all your employees, whether they’re parents or not.
Giving your employees options for different work arrangements, such as remote work, hybrid offices, or flextime hours, enables them to comfortably fit their work schedules into their lives.
This has the added bonus of increasing engagement, performance, and quality of work because employees’ productivity is boosted if they can work when and where they have the most energy.
Of course, employees who have difficulty logging off from their flexible and remote work could suffer from a poor work-life balance before realizing it.
This is why you should weave work-life balance into your company culture. Encourage your team to prioritize their personal lives by promoting time off and inquiring about their families and hobbies.
Try leading from the top by telling your workers about your hobbies and what you do in your free time. It might just be the encouragement they need to give themselves enough time to relax.
Your organization’s outlook is its success, future plan, and prominence in its industry.
Like work-life balance, this point wasn’t the highest on Glassdoor’s job satisfaction factors survey, but it’s still important.
This is particularly true for those working in the private sector, where employees want to see their efforts help the company hit targets and grow in the market. It boosts job security and work performance to be on the “winning team.”
This isn’t an ego thing, either. When your business is successful, recognized, and needed by other businesses, it creates a sense of safety and reassurance for your workers.
That’s why it’s meaningful to share awards, record sales, or other noteworthy achievements with your employees. Be sure to thank them for their contribution to these wins!
Great organizational health is closely tied to a solid business outlook.
Signs of excellent organizational health include:
Employees want to see what the company is working toward, so it’s important to be transparent about business goals involving things like:
Growth (number of sales, clients, and employees)
Product or service development
Having a strong, healthy outlook and a clear plan boosts employee morale and motivation, increasing productivity and retention.
According to Glassdoor’s research, an employee’s years of experience negatively affect their job satisfaction.
The study found that for every year of experience, there was a 0.6-point decrease in employee satisfaction.
This could be due to a variety of factors:
1. Learning about the quality of their work environment over time
Experienced workers have had time to compare many work environments and may be disappointed with the quality of their current work environment
2. Becoming jaded with their employer or industry as they progress through their career
Resentment of one’s work can happen even in great companies depending on the individual
3. Feeling stagnant or disengaged
Many workers grow restless with a lack of challenge and crave stimulation and change
4. Being unable to slow down or retire
Fewer people are able to retire in the modern age or are
5. Making enough money that they don’t see the point anymore
In contrast to the previous point, some older workers are comfortable enough financially that work no longer seems as important to them
So what’s the solution here?
First and foremost: Acknowledging and leveraging the worker experience improves job satisfaction for these long-standing employees.
Ask your employees for their input and insights. Show them their experience is not only valuable but valued.
Samantha Holy, the vice president and chief human resources officer at LEO A DALY, a global planning and architecture firm, recommends placing these workers on meaningful projects that require their expertise and know-how. This includes offering them coaching and mentoring roles.
Holy believes that appealing to and engaging experienced workers helps boost their job satisfaction and attracts new hires who are also older and more experienced.
It builds your reputation as an employer that recognizes and makes the most of rich talent and years of experience.
We learned that job satisfaction factors are much more diverse and varied than just a higher paycheck.
The importance of company culture, in particular, cannot be overstated. Building a strong culture that makes the most of employee diversity and plays off people’s unique strengths is the number one factor that employees are searching for.
It’s also telling that the other important factors affecting employee satisfaction can be linked to culture. Your company culture should do the following:
Promote growth and career opportunities
Have supportive senior leadership
Encourage a healthy work-life balance
For more on this topic, read our article on the top five factors of employee engagement.
Stansell, Amanda. (July 11, 2019). “Which Workplace Factors Drive Employee Satisfaction Around the World?”. Glassdoor. Retrieved October 17, 2022. https://www.glassdoor.com/research/employee-satisfaction-drivers
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