Posted July 13, 2022 by Mark Perna
Episode Title: When Pay Raises Backfire
Pay people more and they’ll stay at the company, right? Well, no. In fact, that strategy can backfire in a big way. Here’s why, next on The Perna Syndicate.
Ep 503 show:
You’re now in The Perna Syndicate—thanks for listening today! This week we’re talking about the fast-changing employment and wage market. It’s pretty crazy out there right now, with many people leaving their current jobs to get a meaningful pay increase at another company.
You’d think that proactively giving current employees a raise would forestall them from resigning, but that’s not necessarily the case. The recent Joblist survey found that 72% of respondents who received a raise from their employer still believed they could make more money elsewhere. In a cruel twist, handing out raises might even contribute to higher turnover.
While it’s obviously important to pay people well, it’s not the only strategy to retain top talent. According to the survey, most people quit their job for other reasons, including a toxic work culture or poor management. Meanwhile, 49% believe that their current employer does not care about their wellbeing, 44% feel mistreated by their boss, and 73% do not see an opportunity for growth or skill development at work.
Clearly, pay is only part of the equation. Employers who want to attract and retain talent need to think not just about what would stop people from leaving, but what would make them want to stay.
Positive culture, good management, career development, work-life balance, and overall wellness opportunities are all part of the big picture. Pay is important, but it’s not everything.
Tomorrow: you’re not going to be able to prevent every employee from leaving. So what can you learn from those who do? We’ll talk about it on the next episode of The Perna Syndicate. See you then!