Economists are known for giving bad news, but this week, I want to share some good news.

Recently, the Conference Board, a source I trust, released its annual job satisfaction report. It shows once again that employee job satisfaction increased over the past year, with 62% of workers saying they are satisfied with their job. The past two years have shown some of the greatest percentage increases since the survey began in 1987.

In fact, the rate is the highest recorded in the 36 years that the survey has been conducted. The lowest point came during the Great Recession, when job satisfaction was only 43%.

There are two primary reasons workers are generally more satisfied now.

First, they say they have better work/life balance, and this is likely due to more hybrid or flexible work schedules. In fact, the workers with hybrid work arrangements report the greatest satisfaction.

In addition, over the past year, productivity has increased by 2.2%, which is above trend growth prior to the pandemic. Even if productivity smooths out to previous trend levels of around 1.5%, this means that hybrid and flexible work is not putting a dent in U.S. productivity or hampering businesses. It’s possible that the higher productivity levels we are seeing now are precisely due to higher employee satisfaction.

Another consideration is that low unemployment rates make it easier for workers to switch jobs. A very high turnover is quite costly for a business. But some turnover is good because workers who feel stuck or unappreciated in their job often move to jobs that are a better fit. This can greatly increase productivity as skills and personalities better match employer needs.

Wage gains are outpacing inflation, and these “real” or inflation-adjusted wage gains have increased job satisfaction. Workers in the survey also state that they are happy with ancillary benefits like health care, bonus pay, and job training or educational programs.

In terms of employee retention, workers state that organizational culture, quality of leadership and work-life balance are the most important factors in terms of satisfaction.

I think this dynamic of greater satisfaction due primarily to hybrid and flexible work is likely a good thing in the long term, especially given our demographic headwinds. The data is in that workers can be happier and productivity doesn’t have to suffer when the employee/employer match is a good one. Unemployment stayed roughly the same in October at 3.9% and that was with the United Auto Workers then on strike. Employment also increased by 150,000 jobs, which is in line with pre-pandemic trends.

Although I think unemployment is going to go up slightly in coming months, the job market is going to stay in favor of workers. And this likely means that hybrid and flexible work and perhaps happier workers are here to stay.

Tatiana Bailey is executive director of the nonprofit Data-Driven Economic Strategies.

Tatiana Bailey