The pandemic has been challenging enough for most small-to-midsize businesses (SMBs). But it's spawned another epidemic that's giving many human resource (HR) managers a weapons-grade case of anxiety. Dubbed the Great Resignation, this trend has employees across most verticals suddenly resigning to find better job satisfaction somewhere else. From IT professionals to factory workers, people are giving their old jobs the boot in favor of something else. The big question on HR's mind is, why?
The issue is murky; expert opinions vary widely, though most consider job burnout to be at least part of the problem. Employees who've suddenly been forced to work at home for almost two years find themselves stressed out by a variety of issues, from the lack of direct social interaction to feeling as though the job has invaded their homes. Many of them are also getting a mite paranoid because of new employee monitoring technologies that some businesses think they need to make sure home-bound employees stay on task. Whether your employee exodus is due to frustration, a new job offer, or simply a desire to explore the gig economy, what's keeping managers up at night is how to keep them.
Throwing money at the problem might sound like the obvious solution, but that's expensive when you're talking about more than a few employees, and according to a recent job satisfaction study by Glassdoor, it's not that effective anyway. Glassdoor based the study on "a sample of 221,000 Glassdoor users who contributed both a salary report and an employer review for the same company since 2014." Surprisingly, it showed several factors impacting job satisfaction, and overall compensation isn't at the top of the list.
That's not to say a salary bump has no effect. Glassdoor's data shows only 10% of workers who make over $120,000 annually leaving a one-star review (out of five) for their employers, compared with 15% of workers making less than $30,000 a year. On the other side of the star spectrum, 51% of $120K employees left four or five-star reviews while only 40% of the sub-$30K crowd did the same.
But while that does show salary impacting employee happiness, Glassdoor's math says a 10% pay bump will bring you just a one-point increase in job satisfaction if that's measured on a scale of 1-100. So bump a worker with a 75% job satisfaction rating from $50,000 to $55,000, and their satisfaction would only rise to 76%. That's not a lot of oomph for the buck.
In addition to upping salaries, employers might consider cleaning up how they pay their workers. According to a Harris Poll study commissioned by Paycom, many businesses are sitting on a messy payroll process, with 73% of employees surveyed saying they've experienced some problem with their paycheck. Top issues included faulty direct deposits (27%), lengthy waits for expense reimbursements (22%), and miscalculated overtime payments (35%).
Yet another Harris Poll study shows that not only are employees unhappy with paycheck problems, but they'd also like a different payment cadence altogether. That study has 83% of US workers surveyed saying they should have access to all earned wages at the end of every workday. That's a big shift from the two- or four-week payroll cycles most businesses have been using for decades.
Okay, that's probably a little hard for management to handle, but the shift would positively impact employee job satisfaction. Harris has 78% of respondents saying that free access to on-demand pay would increase their loyalty to an employer. In comparison, 81% said they'd consider taking a job with another employer, provided that the firm offered on-demand pay.
Money Isn't Everything...Apparently
Glassdoor found that plenty of other factors are even more important. Particularly effective measures included management paying attention to employee morale and well-being, staff recognition for jobs well done, and more transparency into how the organization is run.
All three of those fall into the most-cited reason Glassdoor's respondents gave for a positive job experience: the employer's established culture and values. More than 25% of employees gave this as a key reason they were happy at work. More than 20% cited career opportunities, meaning the possibility of promotion and structured career paths supported by management. Now contrast those numbers with only just over 12% of respondents who indicated they were mainly concerned with compensation.
A final and surprising finding was that experience had a noticeable impact on satisfaction, but as a negative rather than a positive. According to the study, "a one-year increase in years of experience is associated with a 0.6-point decrease in overall employee satisfaction." You'll find many pundit articles across the internet discussing what managers need to do to attract and keep younger workers, but Glassdoor's numbers show you should also be worried about how to keep your older employees, too. After all, keeping people in-house who actually know how to do the job is important to overall success.