If there is one universal amid all the diverse reasons people go to work, it’s the financial imperative.
Apart from a very lucky few, the overwhelming majority of us work because we need to earn a living.
But there’s an aspirational side to earning money too. A scroll through social media platforms brings up millions of images of people’s possessions and trips abroad. These are not presented as symbols of wealth, but rather as illustrations of people ‘living their best life’. They are presented as a way to be happy.
All of which begs the question: can money – and by extension, work – buy you happiness?
This is one of the issues investigated in Indeed’s recent Meaning of Work report, which explores what work means to people.
Pay tops the charts
Indeed’s researchers asked more than 2,000 full-time UK employees to rank the most important factors in their work. Perhaps unsurprisingly, salary came out on top, with 57% of respondents citing it as the most important aspect of their job, ahead of their work having a purpose or getting a promotion.
However, how much satisfaction people get from the money they earn at work is a trickier concept to pin down.
Steve Jobs once said: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”
British cynicism might dismiss this as being “easy for a billionaire to say”. For workers with more humble salaries, their level of remuneration will determine what they can do with their non-working hours. If this is the time when they derive most happiness, their salary thus has a crucial bearing on their happiness.
The high number of people in our research citing salary as their top priority at work suggests many employees may be willing to accept jobs which do not, in themselves, inspire joy and purpose, so long as their salary provides enough money for the bills and then treats on top.
Dissatisfaction is rife
However, nearly a third of the UK employees our researchers spoke to are dissatisfied with their current level of pay. Although average weekly earnings are currently growing at close to their highest rate since the financial crisis in 2008, in real terms average pay is still below where it was 10 years ago.
For many workers, disposable income is still being eaten away by bills and the rising cost of living. Without a significant improvement in real term wage growth, many employees will continue to regard a big pay rise as their best chance of unlocking extra cash to spend on holidays and goods.
In total, 52% of employees said they would consider leaving their current role if their pay did not increase in the next year or two and 67% said a pay rise was more important to them than a promotion. Pay rises often accompany promotions, but employers may find they can keep staff by offering a salary bump, even if they are not able to offer a new, higher role.
Men expect more
Meanwhile, worker expectations of what they should be paid vary. According to the ONS, median pay in the UK is £28,400 a year, though men’s median pay is £31,800 and women’s £26,100. Our survey found more than half of all people rated salary as important to them, although this was true for 60% of men and 54% of women.
On average, women said they would aspire to earn £44,600 a year to ensure happiness, while men said they would require £58,300 to be happy.
This apparent gender gap in earning aspirations is dwarfed by the gulf between men’s expectation for their career peak salary (£62,9000) and women’s more modest £45,8000.
The current gender pay gap therefore appears to have had an insidious effect. Women aren’t just earning less, they expect to earn less too. The recent introduction of mandatory reporting on the gender pay gap revealed the average company has a median gender pay gap of 11.9%.
Overall, in the Indeed survey, around half (46%) of respondents said less than £40,000 could ensure their happiness. Around £35,000-40,000 may, then, be the magical sweet spot in which many employees feel content and happy with their lot in life.
Money: A powerful tool for employers
Money is the primary motivator for many staff, and employers should never underestimate its power to shore up employee retention, not to mention its importance in attracting the right talent to the business in the first place.
Generally, people who switch jobs and employers get a bigger pay rise on average than people who stay in the same job from one year to the next, according to the Bank of England’s analysis. Yet if employers are able to reward employees with a pay rise, even when promotions are not feasible, this could be enough to encourage them to stay.
Only the employee can decide if that extra income will buy them happiness. But nevertheless our research suggests that many may feel happier simply because their bank balance is healthier.