Salary is important. However, it’s not the only currency nor an indicator of one’s happiness at work or life in general. Today, more and more people are discovering that it’s more important to them to have a job where they can experience higher levels of engagement and that supports their lifestyle rather than simply collect a larger salary.
A report from Harvard Business Review, which surveyed over 2,000 American professionals at a variety of pay levels in more than 20 industries, revealed that 9 out of 10 employees would be willing to trade a percentage of their lifetime earnings to do more meaningful work.
The Ideal Household Income Is…
A study conducted by Angus Deaton, Ph.D., a renowned economist, and Daniel Kahneman, Ph.D., a Nobel prize-winning psychologist, analysed more than 450,000 responses from the Gallup-Healthways Well-Being Index (GHWBI), a daily survey that asks roughly 1,000 U.S. residents questions about their wellbeing. Through the study, it was discovered that an annual household income of $75,000 is the sweet spot when it comes to emotional wellbeing.
"No matter where you live, your emotional wellbeing is as good as it's going to get at $75,000,” Dr Deaton says. “And money's not going to make it any better beyond that point. It's like you hit some sort of ceiling, and you can't get emotional wellbeing much higher just by having more money."
Happiness at Work Means More Than Your Salary
Hours and schedule flexibility are both important when it comes to work satisfaction. Being able to leave the office early to pick up the kids, working from home and the freedom to work remotely are all big pluses for many employees.
Financial wellness is another critical factor. And financial wellness means more than merely earning a big salary.
In partnership with leading economists, psychologists and other scientists, Gallup studied wellbeing in more than 98% of the world's population and discovered that managing one’s own economic life to reduce stress and increase security was one of the top common elements that people need to thrive in their lives.
Therefore, employers would be wise showing their employees the total value of their compensation. Without the knowledge of their full compensation, employees may be missing out a large portion of their compensation and run the risk of “chasing the rainbow”. Forbes explains that benefits can play a significant role in the larger financial picture. For example, Google’s free breakfast, lunch, and dinner can add up to over $10k on top of your salary.
In Benify’s Compensation Gap survey, it was discovered that 8 out of 10 employees underestimate their total compensation package. The survey also showed that, on average, employees are unaware of up to 33% of the money their employers spend on them, which includes workplace amenities such as bonuses, insurances, subsidies and pensions.
The Benefits of…Offering Benefits
In 2018, Benify surveyed over 20,000 employees and HR leaders across a variety of industries. The anonymous survey collected insights across a number of areas including benefits, rewards, personal finances, and employee engagement, and more. The data revealed a clear correlation between benefits satisfaction and workplace engagement. Workplaces with low benefit satisfaction are likely to suffer from poor engagement. Likewise, workplaces with high satisfaction are likely to experience corresponding levels of high engagement.
For job seekers, next time you’re negotiating a job, be sure to look at the full value of your offer. For example, do you have the ability to work from home when needed? Does the company offer you flexible benefits? Does your compensation package also include insurances, pensions, and other perks? These all have the potential to add considerable value to your compensation.
As explained in the Cornell University student blog post Happiness through Employee Benefits: The Cost of Doing Business “Companies need to focus on providing support for their employees, making them feel valued, reducing stress and giving them an opportunity to do things outside of the workplace which makes them happy. In recent years, we have seen more companies opt for providing their employees with happiness benefits.”
Want to learn how total compensation awareness contributes to employee experience? Download our e-book, The New Employee Experience: How to maximise and optimise every step of the employee journey.