Why Pay is Only One Factor in Employee Retention

Brief 

High quit rates in the US workforce should prompt managers to focus on employee fulfillment, passion and culture just as they monitor compensation and benefits, writes Alaina Love. Pay does matter, but “the other element to consider is how much fulfillment the employee is receiving from the work they’re doing,” Love writes.

Insight

“I’m giving them my two weeks’ notice,” John told me. “I’ve been in a job that has been sapping me of joy for the last five years. I’m not doing it anymore.”

John is among the millions of Americans making the decision to leave a current job without a new one lined up. In April alone, 4 million workers resigned from their roles, many in search of better pay and working conditions. There has been a zeitgeist shift in our relationship with work, and employers are struggling to keep up.

Not all of the exodus is due to a newly booming job market offering more opportunities. Much of the labor flight was spawned by employees having lived through a global pandemic in which we were all brought face-to-face with our own mortality. For some workers, this evoked questions about all aspects of their lives and the qualities they were searching for in their daily experience.

These questions included:

• Am I in a job that pays sufficiently?
• Is there an outlet for my passions at work?
• Is the work culture nurturing or one that challenges my mental well- being?
• Are my needs for autonomy and work-life balance respected?
• Do I have enough time to pursue my external interests and hobbies?
• Do I have an extended network of support around me to call upon in times of need?

As these questions are examined, they offer insight to leaders about the environment they might create to retain top talent and attract new employees who will stay. Pay will not be a sufficient lever for recruitment or retention because workers are demanding to be seen for the whole of who they are. You can’t “free-lunch perk” your way out of this talent exodus because it’s driven by fundamental needs for meaning, belonging and purpose.