Retaining Employees: Is it About Better Pay or Better Culture?

Have you ever quit a job to take less pay?

Some scoff at the idea, but after the years of fear, anxiety and overwork post-recession, a good company culture in which employees feel valued, appreciated and able to contribute to meaningful work is more important than salary level. A pair of studies found just that:

The findings of a recent Monster/Unum study of job seekers determined that, over everything else, 87 percent of employees want a company ‘that truly cares about the well-being of its employees.’ By contrast, only 66 percent of respondents rated a high base salary as very important.

Another 2011 Unum survey with Harvard Business Review Analytic Services solicited human resource executives’ opinions on this issue, with similar results. This research found that corporate culture is critical to driving engagement, recruitment and retention of a quality workforce.

A company’s values and focus on employee fulfillment are apparently the most important factors in attracting and engaging quality employees, and being a company that cares about the well-being of its staff was twice as likely to be viewed as very important in attracting and retaining staff as providing a high base salary.”

What is your employee value proposition?

And if that’s not enough to make you reconsider the powerful role of your culture in your workplace, keep this bit of advice from Steve Ford, chair of OI Partners, in mind:

Employees make career-related resolutions much more often than bosses — however, the top resolution that workers make each year is to find a new job. If more managers resolved to develop their employees’ leadership skills, invite their input, demonstrate continued interest in their careers and recognize their contributions, fewer workers would be determining to find new jobs each year.”

What is your employee value proposition (EVP)? Why would the stars in your industry want to work for your organization? If you can’t articulate that clearly today, then why would the stars in your own company want to continue to work for you?

Like core values and mission statements, EVPs are mere words on a page unless leadership at all levels works to make it a reality through the culture of the organization.

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Then again, it’s not just leadership or management responsibility to see to this. It’s up to every employee in the organization to look out for their fellow teammates, notice those working hard to demonstrate the values while achieving the objectives, and then appropriately and frequently thank them for it.

What drives the culture in your organization?

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their company culture. As the Vice President of Client Strategy and Consulting at Globoforce, Derek helps clients — including some of world’s most admired companies such as Proctor and Gamble, Intuit, KPMG, and Thomson Reuters — leverage recognition strategies and best practices to better manage company culture, elevate employee engagement, increase retention, and improve the bottom line. He's also a renowned speaker and co-author of Winning with a Culture of Recognition. Contact him at irvine@globoforce.com.

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6 Comments on “Retaining Employees: Is it About Better Pay or Better Culture?

  1. Thanks for
    the information, Derek, very interesting statistics. At LaSalle Network (A
    Chicago-based staffing and recruiting firm) we place candidates at client
    companies on a daily basis. One thing that we really focus on during the
    interview and placement process is that the candidate fits with the company
    culture. We’ve found that focusing on company culture ensures that the
    candidate will stay long-term because they truly enjoy working there. If we
    were to eliminate this element from the placement equation, many employees
    would leave their placements after a short while.

    Internally,
    we implement a variety of programs, awards and events to make our employees
    feel valued and appreciated, but what are your suggestions for making employees
    feel valued and appreciated?

    1. Jhinterlong, that’s not a question easily answered in a reply to a comment. I encourage you to read my blog http://www.recognizethisblog.com – this is a central topic.

      But at the heart, the best way to show employees how much they are valued by the organization is to empower and encourage all employees to recognize and reward their peers (at every level) every time they see someone demonstrating a core company value or contributing to achieving a key objective.

  2. Thanks, Derrek. You’ve hit the nail on the head by saying that an organizations leaders and managers are the driver for culture, hence engagement. One can lock that in by deploying a system of accountability where every manager at every level is made accountable for the output and working behaviours of their direct reports. THAT will give leadership the impetus to retain employees through culture.

    1. Exactly, Mclark, and thank you for bringing that point to the fore. Accountability for more than just results – but also behaviours and efforts in the process to results – is fundamental.

  3. There absolutely has to be a balance. People work to live so we have to be realistic about salaries as well as job responsibilities and sometimes be willing to accept a reduced profit margin for the greater good. In most cases, happy, quality employees will eventually offset your salary investment and lead to greater profits in the future or at minimum sustain longevity in difficult times while contributing positively to the lives of others. Thinking it is one or the other (money or job quality) is a common “black hole” mistake many managers make.

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