Employees don’t leave because of money!
Employees leave because of malalignment with the culture, stagnation in their role and/or… drumroll… they hate their boss.
I had a conversation with a client about this other day. He argued that I was “mostly correct,” however in certain industries, he argued that employees do leave because of money. I countered his argument, standing firm that employees leave for three reasons and money is never one of them.
We did what any good team does and took to the whiteboard for a dry erase jam session. We sketched models and flow charts and ideas and conclusions until we reached a consensus, which I am now sharing with you, along with some practical advice.
If an employee is not paid as much as they are worth for the value of their role, and they can leave the organization to be paid their worth elsewhere, there is a malalignment with the organizational culture.
Some organizations have a culture of “work/life balance” where flexibility and vacation time are placed at higher importance than the dollars on the paycheck. Other cultures are the opposite – work as much as you want, day and night, and you will be rewarded handsomely. An employee’s decision to take a role must align with the company’s pay philosophy or you are bound to have a hiccup down the road.
If you are experiencing turnover in your organization, ask yourself a few questions.
1. What brought your employee to the organization in the first place?
If you recruited your employee on the promise of opportunity – promotion, growth and advancement – and she is stuck in the same role after a few years, you aren’t exactly delivering on your promises. This is a case of stagnation in the role with a side of cultural misfire.
If she took the role because of management and there has been a change in her supervisor, you might have a challenge with the new boss.
Unfortunate News: Be prepared for the reality that this person might be you. A hard truth that is one of the best to uncover as it can be revolutionary for your organization to fix THAT glitch and get out of your own way.
2. How does your pay compare to industry benchmarks and market standards?
(I am going to assume your organization has a compensation strategy and knows how it compares to the market. If you don’t have one, consider a discussion around that prior to what I am about to say.)
If you are a culture that pays slightly less than market, your employees should know why and the values behind it. Conversely, if your pay is higher than average, there must be a reason (you are requiring long hours, maybe? You expect top-tier quality and performance and your pricing reflects that?)
Having conversations about motivations, including compensation philosophy, throughout the recruitment process will hedge your chances of making a hire that is purely “money motivated”.
Employees may take a seat at the table for the money, but they stay for the people, culture (including opportunities!) and leadership. If you aren’t finding answers, consider turning to a third-party to assist with a strategic plan to gather the insights you need. A plan may consist of review of core values as they align with hiring process (do you even talk about them in an interview? Should you? Hint: Yes!), a well thought out exit interview process with a third-party, or taking a thorough dive into metrics around employee retention to find the glitch.
One small tweak could turn things around- and it might be easier than you think.
This article is intended for educational purposes only and is not a substitute for obtaining competent accounting, tax, legal, or financial advice from a certified public accountant, attorney, or other business advisors. You should not act upon any of the information in this article without first seeking qualified professional guidance from your business advisors on your specific circumstances. The information presented should not be construed as advice or guidance from BFBA.