According to Mercer’s 2023-2024 Inside Employees’ Minds study, U.S. employers’ investments in pay, benefits, and flexibility have resulted in employees having more positive attitudes about work this year. Concurrently, financial stressors remain a top concern across all demographics as many employees are struggling with making ends meet, increased debt, and rising healthcare costs.
“This year’s data indicate that we are settling into a new way of working and living—one where people prioritize their well-being amid uncertainty, and where there is an increasingly stark divide between lower-income employees and the rest of the workforce in terms of the ability to survive and thrive,” said Lauren Mason, senior principal in Mercer’s Career Business.
Satisfaction Up Amid Total Rewards Investments
The study found the number of employees who are planning to stay with their company has increased to 68%, compared to 64% last year—but remains below 2021 levels of 72%. Pay and benefits continue to be the top reason workers are attracted to an organization—and the top reason they stay.
Over the last year, employers delivered the largest pay increases since the 2008 financial crisis, whoel also making significant investments in total rewards, which has contributed to higher satisfaction with compensation, benefits, and career opportunities this year, as well as a greater sense of work-life balance and belonging. The study also found pay transparency has benefits—employees who believe they are paid fairly were twice as likely to have been provided with pay data from their employer—and were also 85% more engaged and 62% more committed to their organization.
Struggling With Financial Security
Workers are significantly more concerned about personal debt than they were in 2021, and it is the second-highest concern of lower-income employees (defined in this report as those making less than $60,000 per year). Additionally, more than half of workers across all pay levels report reducing their discretionary spending (51%), and another 37% report they have reduced savings or tapped into their current savings due to continued high inflation.
Another financial concern among workers involves healthcare affordability. One-quarter of employees say they can’t afford the healthcare they need, and that number increases to half (49%) at the lowest income levels (those making less than $30,000 per year).
Long-term financial security, focused on the ability to retire, remains employees’ second-highest concern overall, for two years in a row. Retirement benefits are among the top three reasons employees stay with their organization, behind only pay and healthcare benefits.
Working Towards Wellness
Outside of financial security, “workload and life balance” is a leading concern for employees. Workers again ranked mental health among their top five concerns in this year’s survey. Mental health worries are more pronounced among young employees, LGBTQ+ employees, Black women, people with disabilities, and the lowest earners.
Workers say more flexible and more balanced work will help support their mental health and ease burnout. The top three benefits or actions workers report will help them the most are more time off, reduced workload, and more resources.
Hybrid Work Pays Off
A substantial portion of employees (38%) still prefer to work fully remotely, slightly less than last year’s 42%. Hybrid employees were found to be the most engaged and satisfied across several dimensions with those who worked on-site four days a week reporting the most positive experiences of any group. This group feels more energized, fulfilled, and appreciated, as well as less exhausted, frustrated, and under-utilized than any other work arrangement group.
Mixed Feelings About AI
Overall, workers are more optimistic than pessimistic about new technologies. More than half (51%) of worker ssay that new technologies, such as automation, AI, and robotics will help them do their jobs more efficiently and effectively, while only 35% say these technologies will make their jobs more frustrating or difficult.
On average, employees are tied in their concern about new technology’s impact on job security: 41% o workers think their job security will be impacted, 41% don’t.
“While employers still have slightly more bargaining power in this economy compared to last year, the job market is still tight, and employers should not become complacent,” Mason said. “Employees today have shifting needs and expectations about work—and employers who acknowledge those needs and address critical gaps to support employees’ lives—both in and outside of work—will become an employer of choice for the long-term.”