By Joanne Bondin - Director, MISCO
How Can Organisations Attract and Retain Employees?
We have all heard the saying that money cannot buy you happiness. As the main source of income for most individuals is through work, whether employment or otherwise, it is interesting to investigate the correlation between income, job satisfaction and happiness. This will allow us to see what companies can do about this correlation.
The MISCO Job Seekers’ Behaviour and Expectations Report issued recently has found that the majority of job seekers, 76% of them, indicated that the main reason they start searching for a job is to improve their salary. This is followed by personal advancement which was chosen by 51% of the respondents, flexible working hours which ranked at 24% and the management style which ranked at 19%. What is interesting to investigate, however, is how pay influences employees’ satisfaction.
This insight can make the whole difference between a company having a motivated and productive workforce and one that does not.
As the director at MISCO, my role is to assist companies in identifying the reasons behind the decisions employees and jobseekers make. That is, why they choose to stay in a job or leave, what leads them to like or dislike their company, team or manager, why they choose the jobs they do and what employees value at the workplace. The mix of this knowledge is a wealth of practical data, allowing us to look into the variables apart from salaries that truly create engagement at the workplace.
We have consistently observed that the highest linked variable that leads to job satisfaction, across all income levels, is not the salary package. It is, in the end, the very human need to belong and identify oneself with the culture and values of the organisation. In the Job Seekers’ Behaviour and Expectations Report we could observe that whereas a better salary was ranked high by jobseekers when taking the decision to start searching for a job, this was not consistent with what they answered when asked which company values appeal to them the most when choosing the next company they would work for. In this case, salary scored lower. This means that although salary is an important factor for any jobseeker, deep down, people do not leave a company basing their decision only on salary. Salary is only looked into when other needs, such as believing in the company’s ethos or the feeling that you belong are not met.
Although salary packages may not be the most important driver of employee satisfaction, I am not stating that employers should underestimate its importance. We need to keep in mind that although pay has less predictive power for employee satisfaction than other elements, it is still the top factor that jobseekers consider when evaluating potential employers. Therefore, it is critical for employers to make sure that they offer a competitive salary to attract and retain talent. One way of doing this is by obtaining up-to-date benchmarking information on the salaries being offered in the market.
It is essential that companies ensure that the information they are referencing is obtained from reliable sources and that is based on actual salary data, rather than candidate expectations. Moreover, employers need to resist the urge to benchmark against job titles. As you may appreciate, a Head of Finance position in COMPANY A, which is an international company listed on the stock exchange is different from a Head of Finance position in COMPANY B, which is a start-up company. Instead, one should look at the position profile and the responsibilities the job carries. Lastly, one should be mindful of the time window during which collection of data would have occurred, ensuring this took place just before the report is published.
Once an employer starts offering pay that is within the range of competing firms then it also needs to direct its attention towards ensuring that employee morale, engagement and productivity is maintained. It is believed that further tinkering with the compensation package of employees can only go as far and it is not likely to increase employee satisfaction much. Moreover, while a company may have the best salaries in the market and this can prove to be a reliable technique to get talent through the door, our experience shows that is it not likely to keep them there without considerable investment in organisational culture. This ultimately boils down to making a commitment to having and promoting a constructive culture and values, training and coaching senior management, and creating career pathways that uplift employees in the organisation.