In the current economic climate, employers need to look beyond salaries and bonuses to keep their workers happy, as the unexpected results of a new survey testify

The City & Guilds fifth annual Happiness Index, makes for compelling reading. Its clear message, from a survey of workers in over 20 different occupations, is that salary comes a poor fourth when judging criteria for workplace happiness. The most important factor, it found, was that a job is stimulating and interesting.

Given the current economic climate, it's no surprise that the second most important factor for UK workers is job security. Third is a good work-life balance and the need for flexibility, reflecting the fact that two out of every three families now contain two working adults or a working single parent. Only after these factors does salary enter the happiness equation.

The Index's findings raise a number of important issues for small and medium- sized enterprises about the motivators for their employees. For example, while over 40 per cent of employers offer bonuses to employees, only around 20 per cent are adopting flexible working practices, despite work-life balance being a demonstrated driver of happiness at work. And an even smaller number of employers—10 per cent—currently allow employees to work partially or substantially from home.

What the results of the Index also suggest is how important it is to feel stimulated by our job, and that we are making a contribution. As US author and commentator Studs Terkel wrote in his celebrated study, Working: "[Work] is about a search, for daily meaning as well as bread, for recognition as well as cash, for astonishment rather than torpor."
Managers and employers need to understand the significance of this, to give people the autonomy, and trust, to achieve their objectives in a way that gives meaning to them. Micro managing people may make some managers feel good but it does not provide job satisfaction for employees.

This equally applies to another important workplace happiness factor: flexibility, or giving employees a reasonable work-life balance. With the advent of new technology, there is the real potential for employers to allow employees to work more flexibly. The umbrella group for flexible working, Working Families, has just completed a survey with a number of major companies showing that flexible working arrangements not only increase employee satisfaction and health but also contribute significantly to the performance and productivity of the business. The Chartered Management Institute's Quality of Working Life survey supports this, finding that a "long hours culture" is perceived as undermining health and relationships at home, as well as productivity at work.

Finally, having good working relationships with colleagues is an essential ingredient of happiness and satisfaction at work. The armed services are near the top of the list of the happiest occupations in the 2008 Index, despite recruits' relatively low wages. Nurturing the high morale and camaraderie to match that found in the forces is a real challenge for us all.

Many of us are going through rough times in business, but to retain your employees and get them to go the "extra mile", considering their job satisfaction and happiness may not be such a soft business issue right now—it might just be essential.