Why Financial Compensation Isn’t Enough to Keep Your Employees Happy

Author: Maria Canales

More than ever, companies are struggling to retain employees, especially as the pandemic gave many the opportunity to re-examine their careers and decide if they were happy in their position.

This contributed to a phenomenon described by economists as ‘The Great Resignation’.

According to the Harvard Business Review, financial compensation “show[s] only a marginal relationship with job satisfaction” with countless surveys and studies showing that employees’ reasons for leaving a job are usually unrelated to how much they earn.

What does matter to employees’ happiness?

According to a survey carried out by HAYS Recruiting Experts Worldwide, company culture was the top reason for 47% of job seekers changing jobs.

Likewise, the masses of data collected by JUST Capital – the leading platform for measuring and improving corporate performance – has continually indicated that what matters most to employees is the environment in which they work and how companies treat their employees.

Another key factor that has become more and more important to employees is whether they find their work meaningful. The Harvard Business Review conducted a survey of 2000 participants and that found more than 90% of employees were “willing to trade a percentage of their lifetime earnings for greater meaning at work”.

On average, the percentage of lifetime earnings the respondents were willing to sacrifice amounted to a total of 23%, in exchange for “a job that was always meaningful”.

So, how can businesses improve employee satisfaction?

These key drivers of employee attrition can be worked on in tandem to keep employees happy, engaged, and fulfilled – a key influencer of workplace productivity and of the value that employees can provide to a company.

Improving social support in the workplace and communication between all levels of the business helps to keep employees engaged, making them feel personally valued while unifying employees towards the company’s purpose – a step that can increase the sense of meaning employees find in their work.

Moreover, an individual approach to engaging employees – by creating opportunities to maintain their mental and physical health and by having managers guide their career progression and present them with new developmental opportunities – can help to place employees in the best position to find meaning in their careers, while ensuring they feel personally valued and supported within the company’s culture.

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