When I was at university I was of the mindset that if I could get a job which paid highly enough, it didn’t really matter whether I loved it or not. My rationale for this position was that if I could afford an exciting and luxurious home-life, I would be able to stomach a few hours per week doing something, even if I ended up hating it. So naturally, I became an Investment Banker.
In the first few months, my salary was definitely enough to keep me engaged. The promise that, annually, this could become an even-higher salary, even more so. As I was introduced to more and more of my colleagues, between trying to absorb as much information as possible, I tried to get to know them. So I broke the ice and asked ‘Do you like it here?’. Generally I met a similar answer with each of them ‘Yes, well, the money is good’. This was music to my ears, they like it here. The money is good and this must outweigh any of the downsides.
However, I realised that I was hearing a leaving speech or attending farewell drinks more than once per month. Aside from this not being great for my liver, it was not ideal for my morale. I wondered why all of these people would abandon our glistening glass office and a salary far beyond the market average. Why were these people so unhappy that they would leave? Why would they put themselves through a new beginning in a new environment, a different commute, having to start their internal networking and brand-building from scratch? I knew it wasn’t for a better salary. So what else could they need?
Naturally, as more of my colleagues moved onto seemingly greener pastures, I and those around me started to question our own commitment to the job. I had to ask myself ‘Am I happy here?’ ‘Do I want to stay?’
That brings me to the question for this week’s article: ‘Is a high salary enough to keep your key players?’
According to Leigh Branham, people strategy expert and author of ‘Keeping the People’ 89% of managers believe that their employees leave for a rise in salary. In reality 80-90% of employees who leave their job, do so for another reason entirely. In a study conducted by Fidelity Investments it was found that for the majority of millennials and generation X, evaluating a job offer was more about quality of life and work conditions than it was about financial benefits.
Although economists profess that there is a correlation between earnings and life satisfaction, at least to a point*, in a study conducted by Korn Ferry in 2017, only 19% of the 5,000 people surveyed regarded salary as their main reason for leaving their employer in favour of another opportunity. Other factors are becoming increasingly important to employees and for this reason companies must now transform the mindset that a high salary is compensation enough for a quality work product and ever sought after loyalty from their people.
It is not fair to say that salary should hold no importance for people when deciding to stay in a job as of course none of us would work for free. However, if someone in your team is considering money to be their sole reason for staying, you must decide if this is the type of person best situated to add value. Will this person do what it takes to drive forward the mission of the team? Or will they simply perform to the minimum standard to keep their salary rolling in at the end of each month.
It is vital to remember that striving for a low attrition rate is about more than simply retaining key players for their experience. When I worked at the bank, our new joiners were trained over a fifteen-week period by a manager based in London. This not only engulfed the time of the newbie, but of the manager as well. In fact, human resource advisory experts SHRM estimate that every time a business hires a new employee it costs them between six and nine months salary of that person on average. Would you consider offering a raise to the tune of six to nine months salary to someone expressing a desire to leave? That is the price of replacing them.
The truth is that when evaluating job satisfaction, most people consider a number of factors. We will look at this in detail in a future blog post. However, some of these considerations include relationships with co-workers, progression track, flexibility and meaningful training. Regardless of the cocktail of factors you may employ to drive employee satisfaction, the key to a workforce which not only stands the test of time, but which adds maximum value, is to strike an emotional connection between the person and the organisation. It has been found that 70% of human decisions are made emotionally and not rationally. Therefore, by founding such a connection between the people and the organisation you create a motivation to truly drive its success and the commitment of its people.
This week I challenge you to create a truly motivating and inspiring environment for your team which comprises of more than just a bank transfer. Begin by asking yourself ‘Would you stay if you were them?’
*Princeton University estimate this to be $75,000