JOB SATISFACTION
By Michael Haran
This essay is a commentary on one of Gallup’s Workplace series of articles ”U.S. Employee Engagement Sinks to a Ten-year Low”
The two primary reasons people work are to earn a living (money) and/or to feel a sense of accomplishment (job satisfaction). A Gallup analysis in 2021 found that 48% of America’s working population was actively looking for other job opportunities. Because of the mass of job openings coming out of the pandemic caused recession, the primary reason for looking for another job was to make more money and job satisfaction took second place. Businesses were facing an unusually high quit rate — 3.6 million Americans resigned in May of that year alone — and a record-high number of unfilled positions.
And Gallup discovered that workers in all job categories were actively or passively job hunting at roughly the same rate. Known as the “Great Resignation” or “The Great Reshuffle,” Gallup data showed it was less an industry and more of a workplace issue. The highest quit rate was among the not the engaged but the actively disengaged workers.
THE CURRENT UNEMPLOYMENT RATE
According to an article by USAFacts, The Bureau of Labor Statistics quoted the current unemployment rate as about 4.1% in December 2024. That’s a 0.3 percentage point increase from a year before. The unemployment rate is the percentage of people in the labor force who are actively looking for work but not currently employed. It’s a common way to measure the health of the job market and economy.
The BLS statistics calculates the unemployment rate through a monthly survey to identify the civilian labor force, meaning people who are employed or actively seeking work. It counts part-time workers as employed. It excludes people who aren’t actively looking for work, such as retirees or discouraged workers.
CLASSIFICATION OF EMPLOYED WORKERS
Gallup defines employed workers and managers as either “Engaged, “Not Engaged” or “Active Disengage.” As stated by Jim Harter in a recent Gallup article, employee engagement in the U.S. has fallen to its lowest level since 2014, with only 31% of employees engaged. The percentage of actively disengaged employees, at 17%, also reflects 2014 levels.
Disengagement is very costly with:
- Highly engaged teams are 14% to 18% more productive than low engagement teams, on average.
- Low engagement teams typically endure turnover rates that are 18% to 43% higher than highly engaged teams.
- Replacing existing workers costs one-half to two times the employee’s annual salary. Assuming an average salary of $50,000 that replacement cost translates to between $25,000 and $100,000 per employee.
The percentage of engaged employees has declined by two percentage points since 2023, highlighting a growing trend of employee detachment from organizations, particularly among workers younger than 35. 
These are among the findings of Gallup’s most recent annual update of U.S. Employee Engagement. Though engagement increased slightly midyear, it declined through the rest of 2024, finishing the year at its decade low.
In Gallup’s trend dating back to 2000, employee engagement peaked in 2020, at 36%, following a decade of steady growth, but it has generally trended downward since then.
Each point change in engagement represents approximately 1.6 million full- or part-time employees in the U.S. The declines since 2020 equate to about 8 million fewer engaged employees, including 3.2 million fewer compared to 2023.
DECLINES IN EMPLOYEE ENGAGEMENT: KEY TRENDS
Among the 12 essential elements of engagement. (see below) that Gallup measures, those that saw the most significant declines in 2024 (by three points or more in “strongly agree” ratings) include:
- Clarity of expectations. Just 46% of employees clearly know what is expected of them at work, down 10 points from a high of 56% in March 2020.
- Feeling someone at work cares about them as a person. Currently, 39% of employees feel strongly that someone cares about them, a drop from 47% in March 2020.
- Someone encouraging their development. Only 30% strongly agree that someone at work encourages their development, down from 36% in March 2020.
People of all ages come to work seeking role clarity, strong relationships and opportunities for development, but managers, combined, are progressively failing to meet these basic needs. However, managers themselves are faring no better than those they manage, with only 31% engaged.
WORKFORCE SEGMENTS MOST AFFECTED
The drop in employee engagement in 2024 was most pronounced for these U.S. workforce segments:
- Workers younger than 35. In particular, Gen Z employees were five points less engaged than the year prior, with notable declines on the most fundamental engagement elements: clarity of expectations, receiving recognition, being provided with materials and equipment to do their work well, having opportunities to do what they do best, feeling cared about, and having opportunities to develop.
- Employees in specific industries. Engagement fell in the finance and insurance, transportation, technology, and professional services sectors.
There are a myriad of reasons for people looking for other jobs but for younger people job satisfaction is currently high on the list. The prefrontal lobe of the human brain, which is responsible for organization and categorization, doesn’t fully develop until the mid twenties if not later. As a young person’s brain matures they become more self aware which includes the value of job satisfaction. This is why the average person changes careers, not jobs but careers, seven times in a lifetime. In addition, because of the later maturing brain, many young workers are looking for work that will also help them in their emotional growth.
THE BROADER ECONOMIC CONTEXT
This decline in employee engagement occurred in a challenging economic environment. Job vacancies continued to surpass hiring rates, but fewer people in 2024 said it was a good time to find a job. Quit rates are trending slightly down from 2021-2022 peaks, as reported by the BLS, but remain near their longer-term averages.
The Conference Board reported a downshift in expectations for job opportunities in 2025. While that looked to be the case In December, the new data shows views about the labor market declining for the first time since September. “The return of pessimism about future employment prospects seen in December was confirmed in January,” Dana Peterson, an economist at the Conference Board, said. However, hiring data points to a resilient labor market, continuing a disconnect between indicators and what consumers say is at the heart of their lackluster sentiment.
The BLS has also reported improvements in overall non-farm labor productivity relative to the previous year, but growth in business labor productivity was lower than the previous year’s.
While higher employee engagement leads to more productive business units, how is labor productivity increasing even as employee engagement declines? Leaders working to strengthen their employee engagement strategy should consider three points:
- The quality of work is only one aspect of productivity and is especially difficult for the BLS to measure. The BLS typically measures productivity as the ratio of revenue to hours worked (labor productivity), which is not a measure of work quality. Output per worker can result from technological advances, the rising value of intellectual property or capital investments.
- Employee engagement — the involvement and enthusiasm employees feel toward their work and workplace — predicts numerous outcomes across business units within companies, including quality of work, safety, profitability and more.
- Recent findings from The Conference Board suggest CEOs had lower confidence in their own industries in late 2024.
Employee engagement trends matter for organizational leaders because declines signal potential vulnerabilities for businesses. Broad macroeconomic indexes do not always reflect what leaders and employees are experiencing in their own workforces and industries.
The factors that affect macro conditions do not necessarily align with the micro conditions –such as the quality of management — that directly affect how employees feel at work every day, their individual productivity and their wellbeing. Moreover, macroeconomic conditions, such as unemployment rates, inflation and interest rates, can limit the success of individual organizations that have little to do with the engagement of their workforce. For instance, when mortgage rates are high, even the most engaged and skilled real estate agents struggle to close deals compared with periods with lower rates.
Gallup research attributes declining employee engagement and rising detachment to:
- rapid organizational change
- challenges from hybrid and remote work transitions
- new customer and employee expectations
- broken performance management practices
WHAT CAN LEADERS DO: HOW TO IMPROVE EMPLOYEE ENGAGEMENT
Despite declining overall U.S. engagement, many organizations Gallup has studied have achieved and maintained engagement levels more than twice the national average. Despite the significant challenges workplaces have faced since 2020, strong leaders and managers can reverse engagement declines by focusing on these strategies:
- Define what they want in their workplace culture and how that aligns with the organization’s purpose and value to customers.
- Lead with their own strengths while clarifying the organization’s purpose, approach to people, key decisions and performance. Specifically, include a plan for upskilling managers to build stronger bonds between employees and the organization through clear priorities, ongoing feedback, and accountability.
- Prioritize identifying and selecting managers with the innate ability to engage and inspire employees, especially to repair a workplace environment where employees feel detached.
EMPLOYEE RETENTION STRATEGIES DEMAND PEOPLE MANAGEMENT SKILLS
To engage workers, managers must fulfill the 12 essential elements of engagement. (see below) Those elements range from knowing what’s expected at work to having opportunities to learn and grow. And because engagement has a reciprocal relationship with wellbeing, engaged employees are healthier, more resilient and better performers. Employee Engagement
They’re also more loyal. One Gallup client that focused on propelling organic growth through effective workplace culture found that engagement reduces turnover in critical high-turnover roles by 36 percent and reduces the 100-day attrition rate by nine percent.
Delivering the elements of engagement and wellbeing isn’t difficult, but most managers need help to do it right. Development teaches managers how to conduct meaningful conversations, set expectations and create accountability, individualize performance management to get the best out of people — and create an employee experience that retains workers.
PAY STRATEGIES AND ENGAGEMENT
As stated, though pay is important, money alone isn’t the solution. Some very well-paid people are among the most disengaged, and disengaged white-collar workers are slightly more likely than others to be looking for a job.
Disengagement is a better predictor than pay of disloyalty — workers at every level of income are looking for new jobs — but pay strategies can reinforce engagement or erode it.
Gallup finds that it takes more than a 20% pay raise to lure most employees away from a manager who engages them, and next to nothing to poach most disengaged workers.
Pay structures are most effective when they incentivize preferred perceptions, behaviors and outcomes, but most pay policies don’t. Gallup found that employees who feel their pay and incentives are fair, motivate individual achievement or direct them to do what’s best for the organization are happier with their pay and more engaged. But, at most, 22% of workers can strongly agree with those perceptions, as shown in Gallup’s perspective paper, How to Align Your Employee Compensation and Talent Management Strategies.
Companies have opportunities to maximize pay strategies by calibrating an effective total rewards program with an understanding of how all of the program’s components affect various employee perceptions, behaviors and outcomes. It’s detailed work — Gallup’s work with clients shows that compensation strategies can undermine talent management strategies — but it can prevent underperformance, culture and compliance problems, and rapid turnover.
In any case, attributing today’s (2021) record-high quit rate to pay issues overlooks the bigger picture of the workplace. The pandemic changed the way people work and how they view work. Many are reflecting on what a quality job feels like, and nearly half are willing to quit to find one. Reversing the tide in an organization requires managers who care, who engage, and who give workers a sense of purpose, inspiration and motivation to perform. Such managers give people reason to stay.
In other words, reversing the “Great Resignation” requires fixing the “Great Discontent” — and managers are the key.
ENGAGE YOUR WORKFORCE BY EMPOWERING YOUR MANAGERS FIRST
The hard job of managing people has gotten even harder in recent years. In the article Engage Your Workforce by Empowering Your Managers First, Gallup does a deep dive into how to train and motivate
New demands for worker flexibility in the remote and hybrid workplace and increased risk of employee mental health problems add to the already difficult job of managing. In 2023, Gallup found one in five employees reported feeling loneliness, anger, or sadness during a lot of the previous day, and four in 10 felt a lot of stress. This stat reflects the fact that 40% of the American population suffers from GAD – General Anxiety Disorder.
Managers already have many responsibilities such as carrying out leadership initiatives, keeping up to date with customer and product needs, monitoring time and expenses, performance management, and training. But their role of inspiring people has never been more urgent. They are uniquely positioned to know each employee’s specific needs, career goals and work-life situation.
Here’s the problem: Many managers are also not highly engaged in their jobs. So, the chances of them engaging and improving the wellbeing of those they lead are low.
Only three in 10 managers globally are engaged — feel involved and enthusiastic — in their jobs. Quite understandably, Gallup’s meta-analysis of more than 200,000 manager-led teams found that more highly engaged managers have more engaged teams. This is crucial because highly engaged teams produce higher quality and quantity of output, have more positive daily emotions, fewer negative daily experiences, and have much higher rates of thriving in their overall lives.
Gallup’s recent State of the Global Workplace report found this connection between manager and employee engagement extends to the country level. Countries with a higher percentage of engaged managers have a higher percentage of engaged employees overall. Countries in the upper half of manager engagement are two times as likely to have engaged non-managers.
While manager engagement is low globally, it is still higher than non-managers’ engagement. Managers also report higher rates of thriving in their overall lives than non-managers. They tend to have higher pay and social status. However, more of them report feeling anger, sadness and worry daily, and they experience as much stress and loneliness as non-managers. A major concern is that managers are more likely than those they manage to be looking for new job opportunities.
Improving Workplace Mental Health Starts With The Mental Health Of Managers.
If a company wants to increase workforce engagement, it should prioritize making managers’ jobs as streamlined, engaging and fulfilling as possible. One way is to identify and promote the best methods for selecting and developing managers with the talents and skills to effectively coach in the new and changing workplace. Another is reformulating the primary responsibilities of managing, shifting from administrative work to coaching through ongoing conversations with employees and feedback.
Gallup has studied many organizations globally that have already implemented practices to address problems related to manager engagement and wellbeing. These well-run organizations exist across geographies and industries, with an impressive average of three-fourths of managers and seven in 10 non-managers engaged. Leaders in these top organizations intentionally prioritize the organization’s culture, starting with the quality of managers. They place a high emphasis on:
- the process of hiring and developing managers to be effective coaches who focus mainly on goal setting, ongoing feedback and accountability
- taking a strategic approach by integrating engagement and wellbeing into all stages of the employee life cycle: attraction, hiring, onboarding, performance management and development
- making their support for employee wellbeing visible and consistent, with a holistic approach that integrates benefits and resources across multiple wellbeing domains
Well-run organizations have shown that leaders and managers can have a significant impact on the mental health of the workforce through the cultures they build.
GALLUP’S 12 ELEMENTS OF EMPLOYEE ENGAGEMENT
As time goes on, more and more organizations discover that it’s not necessarily profit and expansion that determine the success of a business; it’s employee engagement.
What, then, are some of the most important aspects of employee engagement? Most people might suggest topics like recognition, communication, or more recently, remote capabilities. However, survey analytics giant Gallup developed a new type of employee engagement element in its latest “State of the American Workplace” report, released in 2017.
Among other fascinating concepts and statistics, Gallup listed the 12 essential elements of engagement. in the form of statements a worker should agree with. If the person agrees with almost all of them, your workplace is in a great position. If they disagree with most of them, though, you have a lot of work to do.
As on-target as Gallup’s 12 Elements of Employee Engagement are, we should look at them through the lens of remote work since they were written pre-pandemic. Let’s see what they are and how to avoid their pain-points:
1. “I know what is expected of me at work”
For your team to have a good grasp of their expectations, you need to perfect the art of goal setting and communication. Routinely discussing objectives during one-on-ones and having a public goal-tracking strategy makes it abundantly clear what’s required of your team at work and the progress they’re making as time passes. “What is expected” also applies to quality of work and effort, which is another standard you should reinforce.
2. “I have the materials and equipment I need to do my work right.”
Believe it or not, only 3 out of 10 US employees agree with this statement. You can’t have employee engagement without the tools needed to be an employee, of course.
In these instances, though, the people lacking materials necessary to work aren’t carpenters missing hammers or teachers missing chalkboards. They’re often remote workers missing reliable wifi or programs that aren’t supplied by the employer, which are problems both harder to fix and harder to communicate. Make sure your remote staff is supplied with what they need to do their job at the right pace, even if it means stipends for supplies.
3. “At work, I have the opportunity to do what I do best every day.”
Every employee has a skill or talent they used to get the position they’ve been hired to. The problem, in a lot of cases, is that their responsibilities become misaligned from those skills and talents.
When a team member works on a project they’re not as comfortable with, they often don’t put out a quality result and they’ll become frustrated with the way things are being managed. What someone wants to work on is probably what they’re best at – put everyone on the task that matches their skillset and your team will be more productive and satisfied. The easiest way to do that, especially with hybrid and remote teams, is using software that specializes in skills matching, automating the work and getting it done in a flash.
4. “In the last 7 days, I’ve received recognition or praise for doing good work.”
You just can’t have strong employee engagement without rewards and recognition. It’s one of the biggest boosters to motivation and satisfaction, and can single-handedly change your office’s culture.
There are different ways to approach it, whether through virtual high-fives and badges, constant verbal recognition, or even a robust rewards program. Whatever you choose, you can’t let good work go unnoticed – ensure your team has something waiting for them when they reach their goals.
5. “My supervisor, or someone at work, seems to care about me as a person.”
Having a personal relationship with your team members is an interesting subject to cover, since there are lines managers aren’t supposed to cross and details that aren’t necessary to share. Knowing details about your employees as people isn’t the important part, per se, but showing that you care about them.
The main way to do this is encouraging them to come to you with any hardships (mostly work related) so you can empathize and find a way to fix them. You never want to be the cold, stern leader workers are afraid to approach. Ensure your team knows that you care about their wellbeing and you’re willing to communicate to find solutions to any problem. This can be tricky with remote team members, so don’t be afraid to strike up a conversation with them to see if everything’s running smoothly at their home desk.
6. “There is someone at work that encourages my development.”
In a similar vein, you want your team to know that you’re interested in their development, both in their skills and careers. This can be best practiced through continued education through a learning management system( which aligns hybrid teams excellently) or even through professional advice. Employee engagement will rise when you’re engaged with your employees.
7. “At work, my opinions seem to count.”
Listen to your team! This is important to every element of employee engagement overall, but problems still persist; 30% of US employees surveyed in 2021 said leadership at their company struggled with communication and transparency. Why not fix that by communicating?
One-on-ones are essential for two-way discussion, but don’t forget to ask the whole team things directly through surveys and polls. This can be especially important for remote team members, as they want their say to be equal to those who can raise their hands in the conference room. Your team’s opinions matter – employee engagement is on the line!
8. “The mission or purpose of my company makes me feel my job is important.”
Having a great mission statement is an underrated way to engage your team. There’s a huge difference between employees working to pay their bills and employees working because they believe in the company’s cause. Align your team by creating a mission statement that inspires them and gives them a meaningful purpose.
Creating a new statement is a big step, but it doesn’t end at hanging a placard on the wall. As cheesy as it might sound, it’s up to you and other leaders to embody the company’s mission – live it! Leading by example and reminding your team of the organization’s purpose will change the culture from within.
9. “My associates or fellow employees are committed to doing quality work.”
This is an element that concerns your work culture as a whole. Whether we like to admit it or not, employees have a good idea of how skilled and dedicated their colleagues are. Whether certain workers try their best or they secretly slack off, reputations are hard to hide.
If one of your employees were to say that their colleagues aren’t dedicated to doing quality work, it’s an enormous red flag that shows your workplace has a culture of underachievement. A culture like this doesn’t just affect your current team, but incoming employees who see the standard that’s been set.
You can use typical performance reviews to determine whether certain employees are underperforming, but to find out if that sentiment is pervasive throughout your team, 360 and peer-to-peer reviews are necessary. Once you know what to fix and where to start, you can set a high standard and make sure your culture is all about overachievement.
10. “I have a best friend at work.”
This one seems pretty simple, but sadly, only 2 in 10 US employees agreed with this driver of employee engagement in 2021. This isn’t some sort of sign that most people are jerks – it’s a sign that making friends in a remote work environment is particularly difficult.
Remote work has exploded since the pandemic began, and since then, office camaraderie has faded in hybrid and remote environments. This can be fixed in a number of ways: casual Zoom meetings, in-person events, or a “water cooler” style chat in a Slack/Microsoft Teams channel.
Social intranets are another solution on the rise, combining the utility of HR programs with the community aspect of social media platforms. Systems with employee profiles are an excellent way to simulate an on-site environment for remote squads. Give your team as many avenues as possible to get to know one another, and they’ll be happier to wake up early on Mondays.
11. “In the last six months, someone at work has talked to me about my progress.”
While it’s nice for coworkers to give each other advice, this “someone” should be a supervisor. Employee development is a type of employee engagement that can’t be forgotten, and so you should be monitoring your team’s progress and checking on how they’ve been growing more often than once a year.
Routinely checking in on progress is one of the many reasons people leaders are starting to prefer weekly one-on-ones over formal reviews; when employees get feedback on their work as they’re completing it, they stay aligned and on track. It also gives managers a much stronger insight into how their professional – and personal – advancement has been. This then leads into…
12. “This last year, I’ve had opportunities to learn and grow.”
Educate your team with learning management systems, help them progress with hands-on assistance and advice, and give them lanes for upwards movement and promotion. Make it clear to your employees that the company doesn’t see them as automatons, but people with lives and futures.
Conclusion
These elements of employee engagement concern much more than productivity and profit – they concern personal worth. Listen to your team, support them, and make sure they’re satisfied with their positions. You’ll get a happy staff, a better culture, and higher quality output.
Knowing is half the battle, as they say – the question now becomes, “What does HR need to do to put these elements into practice?” When it comes to employee engagement, Gallup had 12 answers for you, but we’ve only got one: the HelloTeam platform.
HelloTeam has designed a workplace community solution that will help you with every aspect of the employee engagement experience, from the micro to the macro. Between recognition & reward features, survey tools, a robust performance review system, and more, HelloTeam is uniquely positioned to help you reach both your company’s productivity goals and your engagement goals, whether your team is remote or right in front of you.
Our next essays with be on the the Gallup Workplace articles:
Engage Your Workforce by Empowering Your Managers First
How to engage employees and Framework for improving employee engagement.
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