Background and Introduction

Poverty reduction and achievement of sustainable growth are the two primary targets of the contemporary development plan in Bangladesh (IMF 2013). With an already plentiful labor supply, the main strategies are creating more productive employment and transforming the labor force from a low-return, agriculture-based economy into a structured manufacturing and service sector economy. Scholars have argued that, under proper conditions, surplus labor has the potential to promote economic growth (Golley and Meng 2011; Raihan et al. 2015). However, producing a better outcome from this abundant labor supply requires increased labor efficiency and improved working conditions in the labor market. Like other developing countries, small- and medium-sized enterprises (SMEs) have been the driving force of sustainable growth and poverty reduction in Bangladesh over the past few decades (Zaman and Islam 2011; Begum and Abdin 2015). But unlike other South Asian countries, by recognizing the SME sector as a thrust sector in the 2010 National Industry Policy, the government of Bangladesh determines the structure of SMEs in the country. The SME sector in Bangladesh comprises enterprises in the service, business, and industrial sectors (Bangladesh Bank 2010). Better Business Forum has advocated for the current definition of SMEs, endorsed by the Ministry of Industry and the Bangladesh Bank. When referring to a business, the term “small enterprise” refers to one that is not a publicly traded corporation and meets specific requirements. Small enterprises in the service and business sector have fewer than 25 employees and fixed assets (excluding land and buildings) with a value of Tk 50,000–500,0000. In comparison, medium-sized enterprises have fewer than 50 employees and fixed assets (excluding land and buildings) with values of Tk 50,00,000 and 100,000,000 (Bangladesh Bank 2010). However, while small enterprises in the industrial sector are limited to employing no more than 50 workers and own fixed assets (excluding land and buildings) with a value of Tk 50,000–15,000,000, while medium-sized enterprises in the industrial sector are permitted to hire no more than 150 workers and own fixed assets (excluding land and buildings) with a value of Tk 15,000,000–200,000,000 (Bangladesh Bank 2010). Scholars agree that a substantial SME sector is one of the key strengths of the development of the Bangladesh economy, driving private ownership, creating jobs, and stimulating diversified economic activities (Zaman and Islam 2011). SMEs are generally seen as an essential source of job creation with lower investment (Rattanawiboonsom and Ali 2016). However, this idea doesn’t address a meaningful relationship to policy formulations to avoid various risks in a working environment. The SMEs in developing countries provide a broad employment base but are inadequate in terms of working conditions (ILO 2015). Therefore, it is vital to identify the strengths and weaknesses of small- and medium-sized enterprises, especially in the political and decision-making processes (Sarder 2010). Although many studies have pointed to operational limitations faced by entrepreneurs, academic researchers have ignored the unbridled growth of the informal sector and its resultant working conditions.

In 1999, the Director-General of the International Labour Conference presented the concept of decent work to explain four pillars: employment, social security, labor rights, and social dialogue. Among them, employment encompasses all forms of work, and decent work is therefore relevant not only to workers in a formal economy but also to the informal sector, including the self-employed, unregulated wage earners, and domestic workers (Ghai 2003). The concept of decent work integrates the fundamental and labor rights of workers (ILO 1999). Fundamental rights address freedom of association, equality of work, and the absence of forced and child labor or work in any abusive form. Finally, social dialogue includes work rights in consultations with employers on workplace issues. Among the many relevant decent work indicators, one of the most influential studies on decent work indicators was carried out by Anker et al. (2002). They identified 11 statistically measurable indicators of decent work. These indicators include the practice of decent working hours, the existence of unacceptable work, including child labor, and the practice of employee relations through social dialogue.

Although there is ample literature on the working conditions of employees in various economic activities, the studies have been carried out in informal sectors and only in small- and medium-sized enterprises (SMEs), which are vital elements of poverty reduction and regional inequality (GOB 2011). Hussain and Endut (2018a; 2018b) have conducted recent studies among SME workers, arguing that workplace relations through social dialogue have a significant impact on ensuring decent working conditions and work-life balance. Micro-, small-, and medium-sized enterprises (MSMEs) employ around 31 million people, which corresponds to 40% of Bangladesh's total fifteen-years-and-older population (Rahman 2009). Therefore, it is timely to examine whether the perceived precariousness and decent working conditions affect workers' life satisfaction in the informal sector, namely, SMEs. In our current study, we consider these indicators as working constructs of our structural equation model (SEM), in which we try to investigate path relationships between constructs.

The 2006–2009 Bangladesh Decent Work Country Program (DWCP) included three priorities, including decent and creative employment, rights at work, and other International Labour Organization (ILO) prescriptions, which account for fundamental pillars in achieving a decent work environment (Mondal 2010). The progress in employment opportunities in the last two decades has been varied, especially considering gender, age, and informal employment. Therefore, the potential of entrepreneurship, creative productivity, and the ethics of people in the informal economy must also begin to recognize and address the entire scope of labor rights issues (Trebilcock 2005). The information gap and lack of sufficient data may weaken and challenge the advancing gains of the decent work paradigm. In many jobs where the working conditions are less than ideal, the practice of social dialogue is meager, or livelihood is not sustainable, the idea of decent work is more challenging, and precarity is high. Many studies identified the multi-causal problem of surplus labor and suggested the creation of new jobs (ADB 2010). However, the informal sector's real crisis has always been untouched or partially ignored and needs attention to receive the proper treatment for further development. There is an unquestionable need for sufficient employment opportunities to strengthen the economy by achieving decent work and reducing precarious work in employment opportunities.

We structured the article as follows: background and introduction of this study; concepts of this study; materials and methods used in this study; results; and conclusions and practical implications.

Concepts

Indicators of precarity

The extensive use of precarious employment is not new (Quinlan et al. 2001; Benanch et al. 2014; Kalleberg 2009). It is present in insecure employment, small workshops, home-based work, self-employment, and other informal arrangements (Quinlan et al. 2001). The term has been broadly used for decades in sociology, economics, political science, and the media (Vosko 2006; Kalleberg 2009). But various changes took place in the late twentieth century and paved the way for precarious forms of employment to expand globally and receive academic attention in sociological research.

Although there is little consensus on a working definition of precarity, several researchers put forward meanings from the broader social environment which it is embedded in (Benanch et al. 2014; Benanch et al. 2016). According to them, precarious employment is a multidimensional construct that differs across countries and depends on the labor market’s specific economic and social structure (Benanch et al. 2016; Bosmans et al. 2016; Pacheaco et al. 2014; Moscone et al. 2016). It is non-standard work (Campbell 2010; Mantouvalou 2012; Lightman et al. 2008) which has inadequate job security (Brackpool and Neil 2017) or legislative protection for work rights (Mantouvalou 2012). Precariousness is a multidimensional latent construct composed of six factors: non-standard working hours, employment instability, collective voice, quality of work environment, duration of employment, and part-time work (Pacheco et al. 2014). Although there are multiple indicators involved to define precariousness, arguably the most important indicators are limited workplace rights and social protection, and powerlessness to exercise legally granted workplace rights with other relevant indicators such as employment insecurity, low wages, individualized bargaining relations, and overall working environment (Benanch et al. 2016; Edralin 2014; Lewchak et al. 2003). Using the multidimensional Employment Precariousness Scale (EPRES), Vives et al. (2013) defined the idea of precarious work more concretely, covering 26 items including job instability, individual-level bargaining power over wages and working hours, and workplace rights and vulnerability.

In Asia, researchers consider informal workers as precarious. According to Reza (2016), the construction industry in Bangladesh is responsible for a considerable proportion of precarious workers. Other studies (Barkat et al. 2003; Agarwala 2014) argue that garment work is precarious in terms of limited social benefits and legal entitlements of employment contracts, job insecurity, low income, poor working conditions, and health risks. As precarious work increases worldwide, researchers intend to examine its impact on workers’ life satisfaction. At the same time, most researchers examine the relationship between precarious employment and health status to confirm that precarious work is a social determinant affecting the physical and mental health of workers, their families, and communities (Vives et al. 2013; Lewchak et al. 2003; Benanch et al. 2014; Moscone et al. 2016). Our current study offers a new analysis that examines whether the perception of precarious work indicators affects the perception of decent work in SMEs and affects employee satisfaction in SMEs (informal workers). This study shows the extent and nature of perceived precariousness and decent work and their impacts on life satisfaction.

Indicators of life satisfaction

In their study, Diener et al. (1985), consider life satisfaction as cognitive and judgmental processes that depend upon a comparison of one's circumstances with what is thought to be an appropriate standard. So, it is necessary to clarify that judgment of how satisfied people are with their present situation is based on a comparison with a standard that individuals set for themselves and not externally imposed (Diener 1984). That is why, Diener et al. (1985), in their study based on three study groups, developed a satisfaction with life scale to measure life satisfaction. It is a multi-item scale and is designed around the idea that one must ask respondents for a total judgment of their lives. The scale considers five statements: “in most ways, my life is close to my ideal,” “the conditions of my life are excellent,” “I am satisfied with my life,” “so far I have gotten the important things I want in life,” and “if I could live my life over, I would change almost nothing.” The respondents were asked to express their attitudes about each statement by using a seven-point scale (1 = strongly disagree; 2 = disagree, 3 = slightly disagree, 4 = neither agree nor disagree, 5 = slightly agree, 6 = agree, and 7 = strongly agree). In their study, Diener et al. used the SWLS to measure the life satisfaction of two samples of undergraduates and older adults living in the Urbana-Champaign area. They argue that, unlike other scales, the satisfaction with life study leaves the respondents free to weigh other aspects of their life (such as health and material wealth) and various emotional states (e.g., loneliness) in whatever way they choose.

Precarious work could harm workers’ life satisfaction. Therefore, psychology in the workplace is an important issue that motivates and satisfies employees to perform well in the workplace (Murthy and Shastri 2015). This strategy applies not only to organizational benefits but also to personal growth and development, such as self-confidence, crisis management, and problem-solving strategies. Theoretically, work-life balance practices give employees a sense of confidence that their organization/employer is supporting the well-being and non-work needs of its employees. According to organizational support theory (Eisenberger et al. 1986) and the theory of social exchange, the feeling of support results in higher positive attitudes toward the organization and promotes employee participation and initiative through a feeling of obligation to offer additional benefits in return (Lambert 2000). For instance, flexible working hours have been shown to produce less absenteeism and increased job satisfaction (Baltes et al. 1999). Workers’ friendly interventions are usually referred to as family-friendly policies or work-life benefits and policies (Osterman 1995).

Perceived organizational support (POS) is the focus of the organizational support theory (OST) (e.g., Shore and Shore 1995; Aselage and Eisenberger 2003; Rhoades and Eisenberger 2002). Socio-emotional requirements and the preparedness of the organization for increasing efforts on its behalf are cited as factors in the development of POS (Rhoades and Eisenberger 2002; Eisenberger et al. 1986; Shore and Shore 1995). As an extension of social exchange theory, this model focuses on the interaction between an employer and an employee. Thus, according to OST, workers exchange effort and dedication to their employer for concrete incentives like money and fringe benefits, as well as emotional advantages like as esteem, admiration, and compassion in return for their loyalty (Eisenberger et al. 1986). On the basis of socio-emotional needs, OST admits that a harmonious employee–employer relationship may boost employee well-being as a result of factors such as reduced stress, employee satisfaction, and safety (Baran et al. 2009). A continued full-time employment connection between an employer and an employee is expected in OST, like so many other aspects of organizational behavior (Connelly et al. 2007; Camerman et al. 2007; Eisenberger et al. 1986). According to the OST (Eisenberger et al. 1986) and the theory of social exchange, the feeling of support results in higher positive attitudes toward the organization and promotes employee participation and initiative through a feeling of obligation to offer additional benefits in return (Lambert 2000). For instance, flexible working hours have been shown to produce less absenteeism and increased job satisfaction (Baltes et al. 1999). Workers’ friendly interventions are usually referred to as family-friendly policies or work-life benefits and policies (Osterman 1995). Employee well-being is influenced by supportive work-life activities, such as enhanced POS, which result with higher job satisfaction and fewer family-to-work and family-to-work conflict (e.g., Behson 2002). Previous insights have found a connection between OST and irregular employment (Ang and Slaughter 2001; Camerman et al. 2007; Coyle-Shapiro and Morrow 2006). Rapid globalization and technology breakthroughs are transforming organizational structures and the nature of work (Barkema et al. 2002; Burke and Ng 2006). As a result, irregular working arrangements, such as those involving temporary and contract employees, are becoming more prevalent in the workforce (Kalleberg 2000; Cameraman et al. 2007). Insights from the field of POS show that the fundamental social-exchange dynamics underlying OST apply to nonstandard labor situations (Gakovic and Tetrick 2003; Veitch and Cooper-Thomas 2009). The ramifications of unconventional partnerships for OST, however, are numerous. Nonconventional workers often hold down two jobs at once, leading to positive or negative POS depending on which company is being praised or criticized. Thus far, procedural and informational fairness are linked to POS for contingent workers (Van Breugel et al. 2005; Webster and Adams 2010). OST recognizes that when employees and employers have a great working connection, it can improve workers’ well-being in ways such as decreased stress, increased job-related affect (such as pleasant mood and job satisfaction), and increased safety (Baran et al. 2009). Intriguingly, POS from one source may trickle down the commitment to the other organization and the one offering the support. Recent studies on POS have largely centered on workers’ job satisfaction by investigating stress and how it affects work-life balance, resiliency, health, and workplace security (Behson 2002; Dupre´ and Day 2007; Casper and Harris 2008; Baran et al. 2009).

Materials and methods

Data

One of the largest divisional cities, Sylhet, presents promising opportunities for small and medium-sized enterprises (Al-Hossienie 2011; Khanom 2015). Sylhet is a northeastern region rich in various agricultural, forestry, fishing, and other natural resources (Hussain and Endut 2018a, b). Gas, silicon, sand, and stones are all readily available, paving the way for the establishment of manufacturing enterprises. The timber, paper, and wood products industries would not exist without the availability of forest products. Due to the abundance of a variety of fish resources in the rivers and haors of the few districts of this division, the fish processing sector also shows great potential. The recent emergence of honeybee farming as a lucrative enterprise in this region suggests that honey exports could generate substantial amounts of foreign remittances. Since many different kinds of fruits are readily available in Sylhet, the area also offers ample opportunity to establish fruit processing plants. Most people in this area have family members working outside the country and sending money back home (Al-Hossienie 2011). Sylhet offers a great chance for small- and medium-sized businesses; thus, many entrepreneurs have established businesses locally (Khanom 2015). However, many households lack initial cash and must rely on Small and Medium Enterprise (SME) loans to launch new ventures. Importantly, Sylhet is a promising place for female entrepreneurs (Al-Hossienie 2011; Chowdury and Akther 2016; Hossain 2017). Small, medium and women entrepreneurs received SME loans under the goal for SME loan disbursement in 2010, set by banks and financial institutions for the first time in Bangladesh, who recognized SME development as an essential part of any nation’s long-term economic strategy. As a part of the area approach method, according to Upazila-wise lists of potential SME sectors compiled by Bangladesh Bank Branch Offices (following consultation with local bankers), Manipuri handloom F handicraft industry, and manufacturing of Shital Pati from bamboo and cane (Sylhet Sadar), the business of stone and sand, grocery, and LP gas plant (Gowainghat, Jaintiapur, Golapganj, Kanaighat, Beanibazar, Companyganj, Fenchuganj, Bishwanath), brick field, and timber (Maulvibazar Sadar), orange cultivation (Juri), cultivation of Agore, Agore light and Agore industry (Barlekha), Manipuri handloom industry (Kamalganj), food processing, and welding factory (Habiganj Sadar), fishery, hatchery, and wooden boat (Sunamganj Sadar) are the potential sectors for SME loan. As the entire Sylhet division is one of the most small, medium, and women entrepreneurs based divisions in Bangladesh, this study has chosen the Sylhet division as a study area. This study has collected data from 103 respondents who work in small- and medium-sized enterprises that are SME credit recipients of different banks of the Sylhet division in Bangladesh. We selected them by using a randomly chosen list of loan receivers administered by Bangladesh Bank (State Bank of Bangladesh). Bangladesh Bank has prepared this list for their monthly mobile inspection of the enterprises. The operating SMEs receive their loans through their relevant scheduled and private banks. The interviewed respondents work at SMEs in different districts of the Sylhet Division, including Sylhet, Moulvibazar, Habiganj, and Sunamganj. We considered enlisted credit recipient SMEs as the population of the present study and interviewed one worker from each selected SME. Until October 2017, a total of 9268 SMEs received loans from various public and private banks in the Sylhet division. Of the total number of 9268 SME units, 4301 residing in Sylhet, 2701 in Moulvibazar, 1377 in Habiganj, and 889 in Sunamganj received SME loans that the Bangladesh Bank randomly assigned for mobile inspections. As mentioned, by employing a survey method, 103 workers were interviewed between July and September 2018 from these enterprises. The use of a survey as the research method is supported by other studies (Ahmed et al. 2022; Mugambiwa and Dzomonda 2018; Ahmed and Haq 2019; Chowdhury et al. 2021; Ahmed et al. 2022a, 2022b). In the SmartPLS application, we used the iteration technique 1000 times, reducing the sample to 499. In partial least-square structural equation modeling (PLS-SEM), the minimum sample size depends on: (a) ten times the largest number of formative indicators used to measure one latent construct; or, (b) ten times the highest number of structural paths (arrow indicating) directed at a specific latent construct in a model (whichever is larger) (Hair et al. 2012). We have six indicators used to measure precarious work, and the highest number of structural paths to satisfaction with life scale is four. Therefore, as per the rule of thumb of determining the minimum sample size for PLS-SEM, we considered six indicators to measure precarious work. For this study, the minimum sample size was set to 60. However, as we followed the random sampling of the inspection list of the 2016–2017 fiscal year from the Bangladesh Bank, we interviewed 103 respondents from 103 SMEs.

Model

The goal of this study is to predict and identify some key target and driver constructs in analyzing indicators of precarious work, decent work, and life satisfaction. Therefore, we utilized PLS-SEM over covariance-based SEM (CB-SEM). To identify the significant associations between the perceived precarity, decent work, and life satisfaction, we modeled our study using the partial least square (PLS) structural equation modeling (SEM) technique. We utilized PLS-SEM path modeling to explore parsimonious path coefficients with significant effects of workers' perceived precarity on perceived decent work conditions and life satisfaction. Path models are diagrams used to display hypothetical and variable relationships in a structural equation model (Hair et al. 2014). For ease of understanding, we demonstrated (Fig. 1) constructs that have been used to explain the magnitude and significance of relationships. (Please refer to Table 1 for outer model legends.)

Fig. 1
figure 1

Path coefficients and R-squared

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Table 1 Scale of constructs and their relevant items (Strongly agree = 5, strongly disagree = 1)
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Each construct has its relevant indicators, which have been measured directly. However, in our model, constructs are in latent form, and therefore, they must be measured indirectly. In our working model, we have some indicators inserted into a SmartPLS application (Ringle et al. 2015). In Table 1, we presented model constructs with their corresponding items, and a five-point Likert-scale has been used for responses. When we surveyed our respondents, we collected data on scaling items from 1 to 5 points. The constructs in Table 1 were formed by referring to the statistical indicators of precarious work (based on existing literature), decent work (Anker et al. 2003), and the satisfaction with life scale (Diener et al. 1985). To test our hypotheses, we used our model demonstrated in Fig. 2. In this model, we used four endogenous constructs: social dialogue, unacceptable work, working hours, and satisfaction with life scale and four exogenous constructs: social dialogue, unacceptable work, working hours, and precarious work. In our study, target constructs are decent working conditions and satisfaction with life. A decent working condition has been defined by three constructs: social dialogue, unacceptable work, and working hours. We also considered five indicators (based on Diener et al. 1985) for the satisfaction with life scale which has been mentioned earlier, and six indicators for precarity: salary, work contract, job security, safe work, injury insurance, and social and economic support to the family.

Fig. 2
figure 2

Importance-performance map analysis

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Variables

Statistical indicators of decent work (Anker et al. 2002) are employment opportunities, unacceptable work, adequate earnings, productive work, decent hours, stability and security of work, combining work and family life, fair treatment in employment, safe work environment, social protection, social dialogue and workplace relations, and economic and social context of decent work. Our present study principally focuses on three statistical indicators of decent work: social dialogue, unacceptable work, and decent working hours. We defined precarious work as a multidimensional phenomenon (Pacheco et al. 2014) depending on non-standard working hours, employment instability, the absence of collective voice, a lesser quality work environment, duration of employment, and part-time work. In our model, we also have a dependent construct: satisfaction with life scale. We defined this variable as per the study conducted by Diener et al. (1985), who considered life satisfaction as a cognitive and judgmental process. All latent variables used in our present study are shown in Table 1, which demonstrates all items used in a five-point Likert-type scale. Considering our working variables and their corresponding path model, we assume two hypotheses for this study:

H1: Workers’ perceived decent working conditions depend on perceived precarity.

H2: Workers’ perceived precarity affects their life satisfaction.

Results

Quality criteria of the measurement model

Before going into the hypotheses testing and interpretations, in PLS-SEM, a model is required to undergo a quality criteria assessment process which involves two stages. According to Hair et al. (2014), before proceeding to the evaluation of a structural model, each reflective model must pass measurement model evaluation with satisfactory results. For our reflective model, we assessed the measurement model with quality criteria. We used two types of assessment processes that involve the internal consistency reliability of constructs and the discriminant validity of constructs.

For evaluating internal consistency reliability, we prefer to use composite reliability over Cronbach's Alpha. According to Hair et al. (2014), Chronbach's Alpha gives us an estimate of reliability based on inter-correlations of the observed indicator variables, but PLS-SEM prioritizes indicators according to their reliability. Moreover, Chronbach's Alpha is sensitive to the number of items in the scale and therefore underestimates the internal consistency reliability (Hair et al. 2014). A composite reliability score has a range of values from 0 to 1, where values above 0.70 are considered acceptable for a study (Hair et al. 2014; Sarstedt et al. 2014). In Table 2, we see that the values for all constructs in the model are within a satisfactory range.

Table 2 Composite reliability and R2 of the model
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We used the Heterotrait-Monotrait (HTMT) criterion rather than the Fornell-Larcker criterion to assess the discriminant validity of constructs in the model. According to Henseler et al. (2015), the classical approaches (i.e., the Fornell-Larcker criterion and cross-loadings) do not reliably detect a lack of discriminant validity in common research situations. Therefore, they propose HTMT as an alternative approach to assessing discriminant validity. If we see the HTMT value as standing below 0.90 (although some researchers consider 0.85 as a threshold value), we can conclude that the discriminant validity has been established between two reflective constructs (Henseler et al. 2015).

In our present model, we see that the constructs (except social dialogue to working hours at a value of 0.935) have a value of less than 0.90 of HTMT (Table 3). Therefore, we can confirm that the model’s discriminant validity with very little difference for one association (social dialogue to working hours) has been established. Besides, we ran HTMT inference criteria to decide on the significance of HTMT values. We looked at the confidence intervals of all HTMT values of constructs in Table 3 and found that the upper confidence interval is below 1. Therefore, we concluded that the HTMT values differ significantly from 1, which means the model's discriminant validity has been established for the constructs involved (Table 4)

Table 3 Discriminant validity of constructs (HTMT ration)
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Table 4 Path coefficients, total effects and total indirect effects (with p-values)
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Quality criteria of the structural model

Before measuring the coefficients of determination (R2) and path coefficients of the model, we must assess collinearity among the predictor constructs (Sarstedt et al. 2014). In the SmartPLS application, we used our model constructs to discover any potential collinearity issues among the predictor constructs. We found that all inner variance inflation factor (VIF) values are well below 5.00 (lowest value is 1.00, and the highest value is 2.681). A VIF statistic measures the increase in the variance of an estimated regression coefficient when predictor constructs are correlated in structural equation modeling. A VIF value between 5 and 10 indicates that two constructs are highly correlated and may be problematic for the model prediction (blog.minitab.com 2015). We found, in Table 5, that the highest VIF value is 2.681, indicating that the predictors may be associated to a small degree, but this is not problematic for the model.

Table 5 Effect size (first row) and inner VIF (second row) values
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Since our working model is reflective, we must only consider the inner model VIF values of the collinearity statistic. According to Hair et al. (2014), the threshold value for VIF is 5. Because, in our model, the values of the inner model VIF fall below 5, so we can confirm that collinearity does not reach a critical level in any of our constructs. Therefore, it is not an issue for the estimation of the path model.

State of precarity, decent working conditions, and life satisfaction

Before exploring the relationships among the constructs in the model, we must discuss different mean scores of each indicator. Table 1 refers to the scale (strongly agree = 5, strongly disagree = 1) constructs and their relevant indicators. We see that unacceptable work (one indicator of decent working conditions) has the highest mean composite score (4.28) followed by social dialogue (3.66), precarious work (3.33), and working hours (3.08). Therefore, the workers engaged in SMEs have more perceived knowledge about decent working conditions than precarious work. Some studies (Hussain and Endut 2018a; Volk and Hadler 2018) argue that social dialogue components have the highest impact on achieving decent working conditions and work-life balance. However, this study shows that the most notable indicator, according to respondents, of unacceptable work is decent working conditions. To understand the interplay of the scale items within the indicators, we can see that workers' perceived safe work environment is the most important (mean score = 4.02) among five items in the scale of precarious work. In response to the statement "sufficient salary is the most important thing to my work,” the workers give a lower score than other statements, including occupational injury insurance (3.58), job security (3.56), and job contract (3.17). However, it’s obvious that workers cannot achieve work-life balance in their current jobs as we see the lowest score (2.75) in response to the statement “with this job, I am able to support my family in economic and social terms.”

In our study, social dialogue consists of questions regarding unionism, workplace rights, and worker-employer relations. Overall, we find that SME workers' perceived knowledge about social dialogue receives above-average composite scores (mean composite score = 3.66). Work-right violations and unionism have the highest mean scores (3.81 and 3.80, respectively) among the five items. When we asked the respondents about their perception of working hours, results showed an indifferent response of neither agree nor disagree (mean composite score = 3.08). This shows that SME workers have a better-perceived knowledge of social dialogue than working hours. Although they understand the ideas of overtime and extra wages (3.72), they showcased poor knowledge about the working schedule (3.04 and 2.61) and flexibility (2.91). Among the three decent work indicators (social dialogue, working hours, and unacceptable work) that have been used in this study, the highest average composite score (4.28) was in response to unacceptable work. This implies that workers have a better understanding of the nature and consequences of unacceptable work than other factors. Questions regarding child labor and hazardous work have been included in the unacceptable work indicator.

As we mentioned earlier, the satisfaction with life scale (Diener et al. 1985) has been employed to explore workers’ life satisfaction. Overall, workers have a mean life-satisfaction composite score of 2.63, which shows a very low level of satisfaction. The highest response to the statement, “I am satisfied with my life,” was only 2.96, which shows neither agreement nor disagreement. The lowest mean score was 2.10, which was a result of the statement “If I could live my life over, I would change almost nothing.” The respondents almost unanimously disagreed with that question. This means the workers are not satisfied with their current job.

How important are precarity and decent working conditions to life satisfaction?

After running the PLS-SEM algorithm for the model, we found the path coefficients (demonstrated in Fig. 2) that estimate the structural model relationships. In the diagram, we found some robust causal linkages among the constructs used in this model. this demonstrates that perceived precariousness has the highest causal relations (with a path coefficient of 0.706) with social dialogue (an indicator of decent working conditions) followed by a path coefficient of 0.539 in relation with working hours, 0.345 in relation with satisfaction with life, and 0.301 in relation with unacceptable work. The significance of the model coefficients depends on their corresponding t-value, and whether it stands above 1.96. Therefore, we concluded that all path coefficients above 1.96 are significant to the 95% confidence level.

The most common measurement used to assess a structural model is the coefficient of determination (R2), which measures the model's accuracy and predictive capacity (Hair et al. 2014). In our model, we see (Fig. 2) that the coefficient (R2) represents the exogenous constructs' (precarious work, social dialogue, unacceptable work, working hours) combined effects on the endogenous latent constructs (social dialogue, unacceptable work, working hours, satisfaction with life scale). The R2 value ranges from 0 to 1 (where 0.20 is considered high in a discipline related to consumer behavior or in behavioral sciences) with higher values indicating a better level of predictive accuracy (Hair et al. 2014). In this model, we see that the endogenous construct social dialogue has an R2 value of 0.498, followed by 0.493 for working hours, 0.277 for unacceptable work, and 0.246 for satisfaction with life scale. So, the model's relevant exogenous constructs explained 49.8, 49.3, 27.7, and 24.6% of the variance of the endogenous constructs social dialogue, unacceptable work, working hours, and satisfaction with life scale, respectively. Since the value is above the threshold level of 0.20, we can confirm that the endogenous constructs can be explained well by the connected predictor constructs in the model.

In addition to assessing the R2 values of all endogenous constructs in the model, we must see whether any substantive change to the endogenous constructs occurs (we concentrated on social dialogue, unacceptable work, working hours, and satisfaction with life scale) when we omit an exogenous construct from the model. For this purpose, we utilized effective size estimation (f2), with assessment guideline values of 0.02, 0.15, and 0.35, representing the small, medium, and large effects of an exogenous construct on an endogenous construct of the model (Hair et al. 2014). In the model, we see that the effect size (f2) of the exogenous construct precarious work to social dialogue is 0.993, followed by 0.288 for social dialogue to working hours. Therefore, we can infer that the exogenous constructs of precarious work and social dialogue have significant effects on the model. We see in Table 5 that other exogenous constructs have an insignificant impact on their respective endogenous constructs.

If we consider total and indirect specific effects of the constructs (Table 4), we see that perceived precarious work has the highest effects on perceived social dialogue, unacceptable work, and working hours. These three constructs, in our study, have been defined as the conditions of decent work. The perceived precarious work also has a considerably high effect on life satisfaction when considering the total effects. However, if we consider the specific indirect effects, we see that the perceptions of precarious work have insignificant effects on life satisfaction. Therefore, it can be inferred that perceived precarious work has more effects on perceived decent working conditions than life satisfaction. Although the total effect of the perceptions of precarious work to life satisfaction is 0.428, all indirect effects (through decent working conditions) are proven to be insignificant.

Social dialogue is recognized as the most critical indicator for decent working conditions (Hussain and Endut 2018a) and for work-life balance (Hussain and Endut 2018b) which is the major precondition for ensuring better working conditions. Social dialogue can produce, for the employees in any organization, greater life satisfaction (Carlson and Kacmar 2000; Kim and Ling 2001; Hyman et al. 2003), improved working relations (Kossek and Ozeki 1998), lesser tension (Ezra and Deckman 1996), better psychological well-being (Major et al. 2002), improved physical health (Frone et al. 1997; Kinnunen and Mauno 1998) and even increase the likelihood of marital satisfaction (Hughes and Parkes 2007). As a precondition of decent working conditions, social dialogue plays a significant role and consists of the importance of trade unions and their functionalities. Among other factors, weak labor unionism, directly and indirectly affects working conditions, and hence, affects people's well-being and life satisfaction (Benach et al. 1979; Kalleberg 2009). In a recent multi-country study (Volk and Hadler 2018), it was found that 70% of respondents consider the trade union as necessary to protect their interests. However, the study also found that 21% of respondents think that the trade union is bad for the economy. In India, 51% of respondents see trade unions as bad for the country's economy. Additionally, work-related distress (Yu 2013), wages, working hours (Medagyesi and Zlyomi 2016), working schedule, and leave provisions (Makabe et al. 2015), all affect workers’ job satisfaction and quality of life.

Perceptions of precarious work have direct and indirect effects on life satisfaction. As we have seen in this study, perceived precarity has a more direct impact on life satisfaction than indirect impacts. Many studies reveal that employment stability and job security positively impact the quality of life and life satisfaction of workers (Scherer 2009; Fantone 2007; Cuyper et al. 2010; Khattab and Fenton 2009). In our study, employment instability has been set as a major indicator of precarious work.

Importance and performance of indicators

The importance-performance map analysis (IPMA) is a useful technique in a structural equation model that informs us about the relative importance of constructs in explaining other participating constructs (Hair et al. 2014). With this technique, we can conclude the relative importance and performance of a construct toward its targeting construct. This may enable us to recommend further improvements in the performance of a construct that is of great importance in the inner and outer models.

In the IPMA picture (Picture 2), we see that precarious work has the highest importance for our target construct of satisfaction with life with a value of 0.428. At the same time, this construct has excellent performance (62.192%) for satisfaction with life scale. By comparison, social dialogue has better performance (66.526%) for satisfaction for life scale but has a very poor (-0.032) importance to the model. However, unacceptable work has a very good performance (82.033%) and has moderate importance (0.239) in the model. In a ceteris paribus situation, considering our model, an increase of one point in the performance of perceived precarious work is expected to increase the performance of life satisfaction by a total effect level of 0.428. Therefore, the perceptions about precarious work have greater importance and performance in explaining workers’ life satisfaction.

Conclusion and practical implications

This study explores the effects of perceived precarity on perceived decent working conditions and overall life satisfaction of workers in small- and medium-sized enterprises in Bangladesh. The results show that perceived precarious work has the biggest influence on the perceived social dialogue which is considered one of the three constructs of decent work. At the same time, perceived precarity also has a significant direct impact on life satisfaction. However, when we consider indirect specific effects, we see that perceived precarity has an insignificant impact on workers' life satisfaction. Our model shows that the indicator of unacceptable work has a very good effect on a worker's life satisfaction. A worker’s life satisfaction depends substantially on the perceptions of precarity and decent working conditions.

Several practical applications can be drawn from our research findings. As a result of our results, firms should help employees deal with personal and professional challenges that may impair their contentment with their jobs and lives. Organizations, for example, can improve job satisfaction by giving employees solutions for dealing with the issues they experience in their everyday life by providing them with a general sense of well-being and a healthy and pleasant working environment. It is evident that life satisfaction is more closely linked to total job contentment than most of the individual aspects of the job (Mishra et al. 2014). Considering that job and life happiness have been related to a wide range of positive outcomes for organizations (Scott and Taylor 1985; Iaffaldano and Muchinsky 1985), such activities are likely to boost organizational efficiency (Mishra et al. 2014).

Although this study used the rule of thumb for determining samples, the sample size is small and may affect the abilities of generalization. Besides, this study has used only three decent work indicators to determine the life satisfaction of SME workers, which could potentially affect the model’s strength. However, the study has determined the discriminant validity and internal consistency reliability of the constructs. The study found both are statistically valid and reliable, which seems to be a major strength of the model. The IPMA also shows that perceived precariousness has the greatest importance in the model with very high performance. So, we can infer that, in a condition where other constructs of the model remain constant, the life satisfaction of a worker can be increased with an increase in the knowledge of precarious working conditions. Therefore, we recommend that policymakers pay further attention to raising awareness of precariousness at the workplace to improve the life satisfaction of workers. Research in the future could examine whether positive work attitudes like organizational commitment increase job performance or whether performance drives positive work attitudes, given that the exact relationship between the two is still unconfirmed (Riketta 2002; Mishra et al. 2014). For future study on the causal association between working conditions and life happiness, longitudinal datasets may be a viable option.