Is money always the critical factor in talent retention & attraction?
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No, money is not always the critical/most critical factor, but it is generally part of the equation, especially on our non-leadership positions.
There are a lot of factors that play a role.
Will good employees stay only for the money? Certainly not, it’s a combination of things. Money plays a significant role if someone is underplayed or well below the market then yes, that might be a reason to lose a good employee. In my experience, the employees that are the most motivated and engaged are not always the ones that are paid the highest. It depends on what drives them. More often than not employees want to feel valued and respected, have a sense of belonging and clear path for their career progression.
It might seem it is, but it’s not.
It is what makes them be challenged in an intrinsically way, you must ask yourself what is their drive to be at the company? Is it knowledge? Is it to be part of a successful company or an awesome team? Are they following up someone at the team as a mentor?
They might be questioning themselves if they leave to another company, what they will be leaving behind vs what they will be gaining in the end. If the balance goes to the other company, then they will be leaving.
I once read about the happiness formula, where:
Happiness = Reality - Expectations
If your expectation is higher than your reality, there is no happiness.
If your reality is higher than your expectation, then you are happy.
In the end, people will stick at your company if they feel they are happy about what you give then intrinsically & extrinsically.
It’s important but it shouldn’t be the critical factor. Leadership, cohesive vision and ability to make an impact are all equally as important.
Salary is merely a hygiene factor when retaining and attracting staff. Of course, having a fair and competitive salary is essential to satisfy the base needs of employees, but it is rarely the main factor that drives employees. Other factors such as work-life balance, organizational culture, opportunities for growth and development, recognition and appreciation, and a positive work environment are crucial.