Job satisfaction factors: Identifying the right benefits

Employees that are happy and engaged at work drive better business outcomes. In fact, according to a 2020 Gallup study, highly engaged teams see a 23% increase in profitability and an 18% increase in productivity compared to teams where engagement and job satisfaction are low.

Based on these insights, you would think that employee job satisfaction should be a top priority for employers. But according to Gallup, only 21% of U.S. employees said they’re “extremely satisfied” with their company¹.

Focusing on job satisfaction can help you attract and retain talented workers in a competitive labor market. Many factors can positively influence satisfaction. However, if you don’t offer the right benefits, even your best efforts to improve job satisfaction can fall flat. But how do you know which benefits will truly make a difference in boosting employee satisfaction and engagement?

This article will discuss the key factors that drive job satisfaction. We’ll also list the benefits that have the most impact on employee retention and enthusiasm.

In this blog post, you’ll learn:

• The key factors that drive employee job satisfaction and how they impact retention.
• The specific employee benefits that are most effective in enhancing satisfaction.
• How to create a robust benefits package that will improve engagement and morale.

What are the top factors that influence job satisfaction?

Job satisfaction is how pleased or fulfilled employees feel about their work. The level of satisfaction doesn’t only depend on how much employees like what they do. It’s also impacted by their feelings about their team, senior management, their work environment, and their feelings about being a part of your company.

How satisfied an average employee is significantly affects your company's morale, productivity, and engagement. Satisfied employees are also more likely to stay at your organization. This can contribute to better business outcomes and lower employee turnover. A high retention rate in a tough labor market can be vital to your company’s success.

Below are some critical factors that can affect employee job satisfaction:

1. Organizational culture. Positive company values encourage job seekers to choose your company over your competitors.
2. Development opportunities. When you give staff development opportunities to learn new skills, they feel more supported in growing their careers.
3. Work-life balance. According to a 2023 survey, 82% of employees expect their employers to support work-life balance². Better balance leads to increased engagement, organizational performance, and productivity.
4. Business reliability. A successful business focused on longevity helps employees feel more secure in their roles.
5. Compensation. A fair salary helps keep you competitive, improves morale, and lowers turnover.
6. Work environment. A positive work environment allows your teams to work in a safe space.
7. Rewards and recognition. Appreciating your employees' good work shows you recognize their value to your company.
8. Workload. Having a workforce where everyone manages reasonable workloads aids in satisfaction.

Which employee benefits improve job satisfaction?

A robust benefits package can drive engagement, productivity, and employee well-being. It can also help keep employees satisfied. This is especially crucial if you want to improve hiring and reduce turnover at your organization.

PeopleKeep's 2024 Employee Benefits Survey found that 81% of workers said a company’s benefits package is a critical factor in whether they accept a job offer. But with so many benefit options out there these days, it can be challenging to know where to focus your efforts.

Below, we’ll go over seven employee benefits that can positively impact job satisfaction.

Health and wellness benefits

The first type of benefit that can improve job satisfaction is a health and wellness benefit. This popular perk provides financial coverage for employees when they need healthcare. Due to rising medical costs, health coverage is one of the most important benefits employers can offer. Our survey shows that 92% of employees believe health benefits are important.

Some health and wellness benefits you can offer include:

• Health reimbursement arrangements (HRAs). An HRA allows employers to reimburse employees for qualifying medical expenses tax-free. You offer a monthly allowance for your employees’ medical expenses, including health insurance premiums. This gives your employees the power to choose the coverage that works best for them.
  • With PeopleKeep, you can offer three types of HRAs:
    • The qualified small employer HRA (QSEHRA)
    • The individual coverage HRA (ICHRA)
    • The group coverage HRA (GCHRA).
• Health savings accounts (HSAs). An HSA allows employers and employees to contribute tax-free money to an account for future medical expenses.
• Flexible spending accounts (FSAs). A healthcare FSA is another way employers and employees can set aside money for medical expenses.
• Dental and vision coverage. These policies provide coverage for dental and vision care that health insurance often doesn’t cover.
• Wellness stipends. A stipend allows employers to give their employees taxable money for wellness items and services.
  • These employee stipends can cover various wellness expenses, such as:
    • Gym memberships
    • Fitness equipment
    • Mental health counseling
    • Holistic health services

Traditional group health plans are a popular health benefit. But they’re one-size-fits-all policies with many limitations for employers. A group plan may not work if your workforce is made up of employees of different ages, medical needs, and family statuses. Offering a personalized health benefit like an HRA provides more value and creates happy employees.

How do health and wellness benefits contribute to job satisfaction?

• Offering comprehensive health and wellness benefits showcases you as an employer of choice. It indicates you're dedicated to your team’s well-being in and outside the workplace.
• You can help your staff combat rising healthcare costs. This ensures they can better financially meet their physical and mental health needs.
• Many options, like HRAs and HSAs, are pre-tax benefits. So they can reduce an employee’s tax liability.
• Health benefits help employees stay healthy and productive, leading to fewer sick days.

Paid time off (PTO)

To support work-life balance, you can provide a robust paid time off (PTO) policy. You can offer a traditional PTO benefit that buckets available time off into different categories, or provide a modern PTO benefit that puts all paid leave categories into one bucket. With the modern option, employees can take vacation leave, sick time, holidays, and more at their leisure.

Our survey shows that 90% of employees view PTO as a vital benefit. No matter how you structure your PTO policy, it's sure to increase engagement.

How does PTO contribute to job satisfaction?

• Offering ample PTO prevents burnout by allowing employees to take time off to recharge.
• Taking time off can improve employees' mental and physical health. PTO also helps reduce the spread of illness by stopping employees from coming to work when they’re sick.
• It reduces unscheduled absences and boosts productivity when your staff is at work.
• PTO gives employees better control over their work and personal lives. It also effectively supports work-life integration.

Family benefits

Family benefits help employees balance their personal lives, work, and family obligations.

Some common family perks are:

• Fertility benefits
• Adoption assistance
• Childcare
• Elder care
• Pet insurance

Employers know that employees are more likely to stay with them if they provide family benefits. In fact, a survey found that 87% of employers understand the importance of family benefits. Of that amount, 63% plan to increase family-friendly perks in the coming years³.

How do family benefits contribute to job satisfaction?

• Having benefits that support families reduces employee stress when they’re at work. This can improve productivity and job outcomes.
• Family benefits are becoming more popular. But they’re not an offering at every workplace yet. Adding them to your benefits package can help you attract job seekers and stand out in your industry.
• Childcare and other family expenses are becoming more costly. These benefits give your staff better control over their finances, especially in emergencies.
• When your staff feels you care about their families, they’re less likely to leave your company. This has a positive impact on your retention rate.

Flexible work schedules

Remote work has made flexible working arrangements more enticing to today’s workers. Our survey shows that 57% of employees said having remote or hybrid work options is essential. But flexible work hours or four-day workweeks can also have a positive impact.

Flexible work arrangements can also help you build inclusive and healthier workforces. A recent study found that 70% of workers with disabilities said not having the option to work remotely would negatively impact their health⁴. Harvard and Penn State Universities found that flexible schedules lower the risk of heart disease⁵.

How do flexible work schedules contribute to job satisfaction?

• Flex schedules allow your staff to take time throughout the day or week to balance their personal and work lives in the best way for them.
• With remote or hybrid work, your employees spend less time commuting to work. This will also save them money on car repairs, gas, or transit passes.
• Letting your staff manage their schedules gives them a better lens on the most productive times of day so they achieve their best work.
• Flexible schedules and environments give your employees more autonomy and confidence. It also shows that you trust them, which can improve loyalty.

Educational benefits

As of 2024, Americans owe $1.74 trillion in student loan debt⁶. That’s one reason why education benefits are another appealing perk for employees. Offering these fringe benefits can provide your employees with financial support for personal education.

Education benefits are in high demand. Luckily, there are many options available. Examples of education benefits include tuition assistance, student loan assistance programs, employer-sponsored scholarships, stipends for textbooks or online courses, and more.

How do education benefits contribute to job satisfaction?

• Employees can gain new knowledge that can help them become more effective in their current roles at your company. This can lead to promotions and increased pay, which aids in satisfaction.
• Tuition assistance can help employees pursue college or other courses without paying the full cost. This can save them from financial hardship later on.
• Continuing education helps employees grow skills that can support future job opportunities.
• Expanding educational knowledge aids in personal growth and life satisfaction. This can add a dimension and structure to an employee’s life.

Retirement benefits

Retirement plans allow employees to save money for their future so they’re secure after they leave the workforce. These benefits are some of the best you can offer. And yet, while 89% of employees value retirement benefits, only 62% of employers offer them.

There are many types of retirement plans to choose from. The most popular are a simplified employee pension plan (SEP), a simple IRA, or a 401(k). But no matter your choice, you’ll offer your employees peace of mind as they prepare for retirement.

How do retirement benefits contribute to job satisfaction?

• Many retirement benefits use pre-tax money. Employees can reduce their tax liability by contributing pre-tax dollars toward their plan.
• These benefits can help employees feel financially stable. This reduces the possibility of leaving for a different job later on for higher pay.
• Retirement plans have higher contribution limits for older employees. This can make them particularly attractive to these individuals as an investment tool.
• You show you value your employees and their well-being, even after they retire.

Professional development benefits

Professional development benefits are a great way to encourage your workforce to improve their skills. They also help your organization keep up with industry trends, and help employees grow their careers. This can result in higher pay and greater stability for them and their families.

Employee development programs also reduce your employee turnover rate. According to Zippia, 45% of workers would stay at a company longer if it invested in their learning and development⁷. Enabling professional development allows your current employees to move up in your company. This keeps you from using your resources on new hires from outside sources.

How do professional development benefits contribute to job satisfaction?

• Career development benefits show your staff you’re committed to their professional growth.
• Professional development opportunities equip employees with knowledge and empower them to seek promotions and new challenges.
• Attending conferences and workshops allows for networking within your industry. Not only is this good for your employees' career growth, but it can also contribute to your business’s success.
• When you prove you care about your employees' career growth, they’re more likely to feel supported and appreciated. These can all have a positive impact on job satisfaction.

Conclusion

These days, employee satisfaction isn’t just dependent on salary. To keep your staff happy, you must design a benefits package with perks your employees value. Employers with personalized and thoughtful benefits are likelier to have satisfied employees and lower turnover.

“The key is aligning your benefits package to your employee’s priorities,” said Bill Boersma, owner of OC Consulting Group. “When you meet more of your employees' needs, job performance, satisfaction, and retention improves. Custom benefits and an employee-centric culture are investments yielding big returns through a motivated workforce and lower turnover.”

Even if you can’t overhaul your entire benefits package, small changes can improve morale and keep your business running.

This article was originally published on November 20, 2014. It was last updated on October 11, 2024.

1. Gallup Survey - Employee Engagement Survey

2. HRO Today - Employee Wellness Survey

3. Demand for Better Family Benefits

4. Lancaster University - The Changing Workplace

5. Harvard - Study on Workplace Flexibility

6. Student Loan Debt Statistics

7. Zippia - Employee Training Development Statistics