Survey reveals high levels of job satisfaction

Analysis

Survey reveals high levels of job satisfaction

A Fair Work Commission survey of employers and employees has found high levels of employee job satisfaction and willingness to stay with the current employer, but flagged some areas of concern for employers and the operation of workplace relations legislation.

A Fair Work Commission survey of employers and employees has found high levels of employee job satisfaction and willingness to stay with the current employer, but flagged some areas of concern for employers and the operation of workplace relations legislation.

The Australian Workplace Relations Study (AWRS) covered more than 3000 employers and 7800 employees. It is the first major official survey of employers and employees since the Australian Workplace Industrial Relations Survey (AWIRS), last conducted in 1995. It used a series of online questionnaires to collect its data. The preliminary findings are discussed below,

Labour costs as percentage of revenue


When organisations were asked to divulge the cost of wages and salaries as a percentage of income from sales and service, 25 per cent said it was less than 15 per cent, 32 per cent said between 15 per cent and 30 per cent, 24 per cent said between 30 per cent and 50 per cent and 18 per cent said more than 50 per cent.

About 60 per cent said they had metrics in place to measure employee productivity, down from almost 70 per cent in the 1995 survey. Forty-two per cent said that productivity had improved over the past year, with 43 per cent saying it was much the same and 15 per cent saying it was worse.

Employment status


The survey found that 21.6 per cent of the workforce were casual employees. About 31 per cent were part-time employees (defined as working less than 35 hours per week). These percentages were similar regardless of the size of the organisation.

Low use of individual flexibility arrangements


Only 13.5 per cent of organisations used the individual flexibility arrangement (IFA) provisions of the Fair Work Act for the purpose of varying wage rates. Large organisations (more than 200 employees) were much more likely to do so (37.5 per cent).

Flexible work arrangements often not formalised


Flexible work arrangements are widely used in Australia but a large number of them are made informally instead of by using the Fair Work Act’s provisions or by documenting them as part of the employment conditions or contract.

Only about 40 per cent of employers had received a formal request from an employee for flexible work arrangements. About 28 per cent of employees said they had made a request, but 62 per cent said they did so informally and verbally.

Flexible starting and finishing times are now almost universally offered by employers, although about half did not offer them to all employees.

Other common flexible work arrangements were leave arrangements such as purchased extra leave (provided by 55 per cent of employers), time off in lieu of overtime (43 per cent), “banking” of hours through arrangements such as rostered days off (31 per cent) and opportunities to move from full-time to part-time work (28 per cent).

Performance-based pay


More than one-third (35%) of organisations used some form of performance-based pay. The most popular form was bonuses (paid less often than quarterly), used by 68 per cent. Twenty-three per cent paid bonuses quarterly or more often and 33 per cent paid employees commissions.

Employees’ views


Job satisfaction, career opportunities and development, attitudes towards working hours and intentions to seek other employment during the next 12 months were all surveyed in a section of the report entitled “Employee experiences”.

Job satisfaction


Overall level of job satisfaction among employees was relatively high, and higher than has been reported by several other studies conducted by private sector organisations. On a scale of one to seven (seven being “extremely satisfied”), the overall score was 5.42, well above the “average” on the scale (four). Women were slightly more satisfied overall than men.

For seven separate components of job satisfaction, the highest-ranked were flexibility to balance work and non-work commitments (5.67) and freedom to decide how to perform the work (5.66). For both of these, women gave significantly higher scores than men.

In descending order came the work content itself, job security, working hours and having a say about what happens on the job. The lowest-rated component was satisfaction with total pay, but at 4.79 it was still rated as better than average.

For each component, ratings tended to decrease as organisation size increased.

Key drivers of job satisfaction


When asked to rate the importance of each of the seven components to their job satisfaction, balancing work and non-work commitments was rated most important by 32 per cent of employees, well ahead of the work itself (20 per cent), job security (16 per cent) and total pay (14 per cent).

The other components all scored less than 10 per cent. Women in particular rated work/non-work balance highly, with 37 per cent saying it was most important.  But for total pay, 18 per cent of men versus only 12 per cent of women rated it as most important.

Work/non-work balance was the most important component to employees in all industry sectors.

Career development and opportunities


Almost half (44 per cent) of employees identified at least one barrier to their career development and progression, with women more likely to do so. Lack of higher-level roles and promotion opportunities was by far the main reason (63 per cent), followed by age, lack of access to training, commitments outside work (eg carer responsibilities) and inequitable recruitment practices (not selecting on basis of ability or experience), all mentioned by between 17 per cent and 20 per cent, and gender, mentioned by 7.5%.

Preferences to work extra hours


Thirty per cent of all employees said they would prefer to work longer hours (to earn more money) if given the choice. For part-time and causal employees, the percentages were 38 per cent and 46 per cent respectively. Only 7 per cent would prefer to work fewer hours and earn less money.

Do employees want to stay with the same employer?


Overall, three-quarters of all employees wanted to still be working for the same employer in 12 months' time, although 19 per cent (ie one-quarter of all employees) wanted to have a different role with that same employer. Seven per cent wanted to work in another industry and 6 per cent wanted to work for another employer in the same industry.

There were variations between industry sectors. The most “loyal” employees were in the electricity, gas, water and waste services sector (84% wanted to stay with current employer), with those in accommodation and food services the least loyal (63%).

The two sectors with the highest proportion of employees who wanted a different role with their current employer were professional, scientific and technical services and public administration and safety (27% per cent) while those in education and training (only 14 per cent wanted a change) were the most likely to be content with their existing roles.

What it all means


The scope of this survey was very wide-ranging, and as its results are progressively released a large amount of useful data will become available. It is 20 years since a similar survey was last conducted by an Australian government agency, and since then workplace relations legislation has had three major overhauls in 1996, 2005 and 2009.

The results relating to employee perceptions paint a much more optimistic picture than recent surveys of engagement and job-seeking intentions that have been conducted by organisations such as management and recruitment consultants, particularly in relation to issues such as job satisfaction and intention to stay with the current employer.

For example, this survey found that 75 per cent of employees wanted to stay with their current employer, but other recent studies have claimed that more than half of all employees are planning to leave within the next 12 months.

It is unlikely that economic conditions have contributed to any change in employees’ attitudes, as the survey questions asked whether they wanted to stay, not whether they intended to stay. The high qualitative scores for most components of job satisfaction are also consistent with not wanting to change employers.

A cynical person might suggest that management and recruitment consultants might have a vested interest in making the situation look worse for employers than it really is, in order to sell their services, but one would have to closely analyse the questionnaire, definitions and other survey techniques used to determine whether there was any basis to support that view.

A more plausible contributing factor appears to be that this survey included a higher percentage of small business employers and employees, and the results indicate that employees in small businesses tend to be more satisfied than those in large ones.

The latter factor might also explain the lack of formalised arrangements for flexible work options, as small businesses are more likely to handle such matters informally.

The relatively large percentage of employees that want to work longer hours for more pay adds evidence to the view that underemployment is a significant issue that adds to the gravity of the issue of unemployment, although it is not counted in official statistics and is not as visible.

Further information

The full preliminary report can be downloaded here. The FWC intends to release further results over the next few months and will be holding a conference in Melbourne on 25/26 June 2015.
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