The world has, over the decades, moved from being product and manufacturing-intensive to being service-oriented. With the growth of soft powers and service economies, countries and organizations realize the focus they have to place on human resources. There are some sectors like IT and Outsourcing that witness high attrition by virtue of their nature. But whether attrition is a small or big problem, HR must be geared towards reducing it and it starts with keeping employees happy.

Importance of Employee Satisfaction

Employee satisfaction or job satisfaction is one of the key goals of all HR personnel irrespective of what their individual KRAs are. A satisfied employee is not just a retained employee but an ambassador for the brand, internally and externally. She can help dispel the apprehensions of others and can defend the company in various fora. Happy employees are more loyal to the company and its objectives, they go the extra mile to achieve goals and take pride in their jobs, their teams and their achievements.

The majority of organizations view job satisfaction as dependent on 2 things – salary and ‘recreational activities’. While employees do make an impression based on these parameters, they cannot form the basis of employee engagement. Recently, a study published by Harvard observed that employee engagement programs only serve as a shot in the arm and satisfaction levels dip soon after. What matters is how HR understands the needs of its employees and what it does to bring a match between employee needs and company goals.

Workforce and Challenges

According to Michael Page's 'Job Confidence Index Q1 2017', the three main reasons why people in India seek jobs are to acquire new skills (48% of respondents), better work-life balance (39%) and higher income (34%). Contrary to common perception, less income and stressful jobs are not why people look for better opportunities. Today’s workforce is hungry for new challenges and growth and if their job cannot provide them that, they do not hesitate seeking greener pastures.

Some factors matter most to employees when it comes to satisfaction, like how it respects employees, whether people can trust senior management, how secure and clear their career paths are and of course, how fairly it pays them. Organizations that ‘invest’ in these factors become experiential organizations and witness long-term gains.

Employee Satisfaction Matters

Employee satisfaction needs to be treated with both short and long-term visions. In the short term, it is directly linked to attrition and employee-organization match. It is important that people perceive the company in a positive light in their early days of employment, else it would not take long for them to look for a change. In the long term, it is more damaging when an employee is not satisfied but continues to work with an organization due to other reasons. The employee starts to look for reasons to dislike the company more. For example, if a bad appraisal is the core reason behind her disappointment, the employee might then perceive that there is favouritism or that the company does not treat her as a valuable asset. Such impressions corrode the value an employee places on the company and this gets projected extrinsically, often among an audience with whom the equity of the organization gets affected.

A dissatisfied employee expresses her negative perceptions more in external forums than internal ones, for fear of repercussion. And when an existing employee speaks ill of the company, it reduces the prospects of the listener to join the company and the reputation of the organization is impacted. Hence it is also important that HR identify such employees and work towards alleviating their problems and converting negative impressions to positive ones.

Job satisfaction is a very important part of an employee’s lifecycle and motivation to remain loyal to and employed with an organization. A number of activities or tasks of an HR team directly or indirectly influence employee satisfaction levels. Therefore HR must also remember that how a company functions through its policies, senior management and culture will impact how happy employees are and will help it reap financial, cultural and brand equity benefits.