The Great Gloom: Employee Satisfaction Drops to 3-Year Low

“Since the beginning of January 2023, employee happiness has been in freefall, showing a strong correlation between economic conditions and employee happiness and engagement,” according to Gallup’s “State of the Global Workplace 2023” report. It continues: “Job security and income stability are essential factors affecting micro job satisfaction, as well as macro consumer confidence and economic growth.”

This unhappiness is hurting businesses as well as individual employees. Low employee engagement reduced global GDP by $8.8 trillion, Gallup found. “If you’re not thriving at work, you’re unlikely to be thriving at life,” the report explains.

That said, happiness varies significantly by industry:

• Despite a small slip from the second to third quarter and from 2022 to 2023, construction still reigns as the happiest industry.
• Travel and hospitality continues to be the only industry with growing employee happiness, with scores improving from the second to third quarter.
• The technology; finance; and restaurant, food, and beverage industries all hit three-year lows in the third quarter.
• Although nonprofit scores remained flat from the second to third quarter, year-over-year satisfaction is up by one point.
• Healthcare employees’ happiness rebounded, with a five-point increase from the second quarter, reflecting a 17 percent improvement since June. This upward trend is expected to continue into the fourth quarter.
• Education also bounced back, with an 18 percent increase from June. It was a full point higher than last September.

Several factors contribute to relative levels of satisfaction. Companies with an average employee tenure of less than three years generally have happier staff than those with a longer average tenure. On average, shorter-tenured employees are 6 percent happier.

“Onboarding sets the tone for the rest of an employee’s feelings about their employer,” the report says. “Sixty-two percent of employees said their impressions of their company from the first day at work are still accurate. So what do your newest employees need to feel happy and successful? Nearly all new hires want onboarding to include an introduction to employee guidelines and the company’s mission statement and values.”

Company size also plays a role. Small and medium-size businesses with fewer employees tend to have happier employees compared with larger companies. Moreover, smaller companies have maintained their happiness over the years, while larger companies have seen increased unhappiness as their employee population grows.

“The widening gap in employee happiness as companies grow highlights the importance of tailoring and adjusting HR strategies over time, especially given the current economic instability,” the report says. “What employees needed or expected last year might no longer apply. It’s important to proactively create a culture of open and transparent communication.”

From: BenefitsPRO