Career and Jobs

Job Satisfaction Stays High Despite Pandemic, Economic Crisis

Despite the pandemic, economic crisis, mass layoffs, and the increase in the unemployment rate, job satisfaction did not decline in 2020, instead hitting a 20-year high, according to The Conference Board Job Satisfaction Survey from November 2020. The shift to remote work did not seem to hurt job satisfaction either.

Overall job satisfaction increased for the 10th consecutive year

Source: The Conference Board

Usually there is a strong connection between job satisfaction and labor market conditions. Respondents who say that openings are plentiful in their area are much more likely to be satisfied with their jobs than respondents who say that jobs are hard to get. This is presumably because people can and do leave jobs they don’t like. When labor market conditions are weak, and the risk of job-loss is higher, people are more likely to stay or end up in a job they do not like, while wages, benefits, and related spending on employees are likely to suffer.

Determinants of job satisfaction which relate to labor market conditions, such as job security, wages, bonus, retirement/pension plans, potential for future growth, and spending on training, tend to suffer during recessions. The large drop in Satisfaction rates in 2008-2010 are illustrative (See chart).

And indeed, satisfaction with these categories did decline in 2020, but less than expected. Amid the pandemic-induced recession, the labor market did not behave as it usually does when unemployment is very high. Instead, finding qualified workers is difficult, the quits rate is high, and wage growth did not significantly slow down. Why the disconnect? While high unemployment typically means many job seekers per job opening, that has not been the case in this crisis. Many people listed as unemployed are not actively or seriously looking for a job for various reasons, including: the hope that they will return to old jobs, generous unemployment benefits, the fear of getting infected at work, and the lack of childcare and other dependent care solutions. As a result, the impact of weak labor market conditions on job satisfaction was more muted than usual.

At the same time, companies devoted more efforts and resources to supporting their employees’ well-being, helping to keep overall job satisfaction for workers at a high level. Many of the components of employee job satisfaction that companies directly control, such as the health plan, performance review process, flexible time plan, family leave plan, sick leave, and supervisor, significantly improved in 2020.

While one of the biggest pandemic-induced changes was the massive shift to remote work, the results of the job satisfaction survey suggest that remote workers were not significantly more satisfied with their jobs than other workers. Offsetting factors may have precluded remote work from affecting job satisfaction. While some respondents may have appreciated the increased flexibility and the absence of a daily commute, others may have suffered from the lack of in-person interaction and perhaps a less-than-ideal working environment at home, due to inferior equipment, lack of space, or inadequate childcare and other dependent care options.

In 2021 and beyond, we expect a significantly improved economy to drive job satisfaction even higher. By May-June, the number of new COVID-19 cases should be significantly lower due to the ongoing vaccine rollout, and the economy could start adding jobs at an accelerated pace.

The strong growth in demand for workers will likely lower the unemployment rate to almost 4 percent by this year’s end. When the pandemic hit, labor shortages seemed to be years away, but they have already made a comeback in 2021. According to a March survey by the National Federation of Independent Businesses, 42 percent of firms say that they have job openings that they are unable to fill right now, the highest rate in the survey’s history. In such an environment, the risk of being laid off is smaller, more workers will look for, and find, jobs they enjoy, and wages will rise.

Reduced stress for workers as the pandemic and childcare crises fade may raise job satisfaction as well. Additionally, continuing a long-run trend, most new jobs will be in professional occupations that tend to be more satisfying than manual services and routine office jobs (which are gradually being replaced by technology). That will further raise overall job satisfaction.

In sum, many people who are currently unemployed are likely to find work in the coming year. And for those with work, job satisfaction is likely to improve, not just in 2021 but beyond. Americans should look forward to a prolonged period of low unemployment and improving job satisfaction.

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