It’s easy to assume that the promise of a high salary is what will help you recruit or retain your top talent. At times, research supports this idea. For example, research has found that minimum wage growth is one of the top 3 driving forces for why people leave their job. And, when people leave their jobs, the average boost they receive in salary is 10 to 20 percent, suggesting that it’s one of the key reasons they job hop. Last, as much as 44 percent of employees—almost one out of every two—say they would consider taking a job with a different company for a raise of 20 percent or less in salary.
But do these statistics tell the entire story? How much does pay really affect the overall employee experience?
Pay Only Goes So Far
Once an employee (in actuality, their household) passes a certain threshold in pay, the emotional benefits that come from more money become less impressive.
Two Nobel Prize winners (Daniel Kahneman, Ph.D. and Angus Deaton, Ph.D.) found that happiness, or the ability to manage stress on any given day, does improve, in general, with income—up to a point. Kahneman and Deaton found that a threshold exists where once people pass an annual income of about $75,000, the benefits to their well-being don’t continue to increase at the same rate.
Said another way, employee pay has its limits when it comes to impacting a person’s well-being. Rather than pay alone, there are many other areas that are much more impactful on the employee.
Here are 3 critical factors that contribute more to the employee experience than pay.
1. Regular, Real-Time Feedback
High-performing organizations have consistently revamped one major area within their culture: how they go about collecting and delivering feedback.
Frequent and timely feedback—offered weekly, every few days or even hours, depending on the task—is much more effective than waiting for once-a-year opportunities to let employees know how they’re doing. Real-time feedback allows companies to be more agile and responsive to better meet employees’ needs. Getting feedback in this way, on a consistent basis, keeps employees invested in their work.
Takeaway: Feedback is a major driver to influencing an employees’ experience and their likelihood to stay with contributor to the end-to-end experience an employee has within a company.
2. Development & Growth Opportunities
One of the most important parts of an employee’s entire experience is having talent processes that support their long-term growth. Research shows that one of the strongest predictors of employee satisfaction and intent to stay is their perception of career opportunities within their company.
Employees who are able to see a clear path for how they can advance in the company are much more likely to be invested in their work. While formal training or learning programs are often found within high-performing organizations, peer coaching is also one of the most effective ways to offer development opportunities to employees today.
Takeaway: Employers need to focus on provideing ample opportunities for employees to develop, including setting a clear path of progression in their careers.
3. Investment in a Positive Workplace Culture
When it comes to attracting talent, pay and benefits will be strongly considered by candidates. However, especially with your higher-earning segment of employees, pay won’t keep your talent. What does keep talent around: a positive workplace culture.
These factors include the culture and values of a company; senior leadership; career opportunities; a positive business outlook; and work-life balance. In fact, all of those factors rank higher than pay in terms of what matters most to employees.
4 questions that feedback can help you validate when it comes to your employee experience include:
- Do employees feel equipped to do their work to the best of their ability?
- Do employees feel recognized and valued for their work and contributions?
- Do employees feel a sense of purpose in their work?
- Do employees feel they have had recent opportunities to learn and grow?
Takeaway: the employee experience is directed impacted by a positive workplace culture, and that outweighs pay and benefits in the eyes of employees.
Money Doesn’t Buy Engagement
Competitive pay is a factor impacting the employee experience, however it certainly isn’t driving the employee experience. All in all, it turns out that compensation and benefits are among the least important factors making up the employee experience, especially as an employee’s compensation rises.
Gather Feedback & Insights on Your Employee Experience
Employers can continue to focus on improving the employee experience through feedback, development and growth opportunities, and adding to your culture in ways that are aligned with your values.
Talmetrix improves business outcomes for talent-focused organizations by capturing employee feedback and linking it with your business metrics. The generated insights are used to improve your employee experience, as well as factors including retention, performance, productivity and culture. If you’re interested in gathering feedback and developing insights for your organization, contact us today.