Is money or development more important when trying to retain people?

You’re planning employee retention strategies, but what should you focus on?

Although salary remains top of mind for most people, it’s important to remember that it’s not the only factor that contributes to an employee’s satisfaction at work.

The Money Factor:

There’s a big focus on salaries for most people, in fact, they are 4.5x more likely to value the factors they can see, like salary, when accepting a job offer. People want to make sure they will be getting market value and will be paid what they are worth.

1. Cost of Living: Both Australia and New Zealand have a high of cost of living, globally ranking number 10th and 19th, respectively. Offering a competitive salary will help ensure that your employees will meet their financial goals, maintain a decent quality of life and feel financially secure with you.
2. Market Demand: Offering a competitive salary ensures you stay ahead of the counter offers and decreases the chances of your employees accepting another, better, offer.
3. Motivation and Satisfaction: A well-compensated employee is likely to mean a more motivated and satisfied employee and we all know this leads to better retention rates and increased productivity.

However, relying solely on money to retain employees has its limitations. A pay check alone cannot satisfy the deeper desires and aspirations of today’s workforce.

The Development Perspective:

Growth opportunities are becoming increasingly important , especially for the younger generations employed in your teams. People want to know that they are not only valued but also have the chance to grow within the company and expand on their current skillset.

1. Skills Enhancement: Offering opportunities for employees to acquire new skills, attend training programs, and further their education can be a powerful retention strategy. Remember people find their role more satisfying when they are encouraged to grow.
2. Career Advancement: Providing a clear path for career progression and promotions within the company can motivate employees to stay and commit to long-term goals.
3. Keep Challenging: Monitor your team’s satisfaction with their roles and offer opportunities for growth and challenge. Encourage them to explore new experiences or projects for continuous learning and to prevent monotony in their positions.

Finding the Balance:

While both money and development are crucial aspects of employee retention, the best approach often involves finding a balance between the two.

1. Personalised Solutions: Recognise that not all employees are the same. Some may prioritise monetary compensation, while others may value professional growth more. Personalised retention strategies can help cater to individual needs. Use our latest Feel Good Index to get a deeper understanding into the current drivers motivating workers in their roles.
2. Regular Feedback: Remember things can change pretty quickly so maintain open lines of communication with employees to understand their current career goals and financial aspirations. Regular catch-ups can help identify the right combination of compensation and development opportunities for each person.
3. Stay Competitive: By offering what your competitors do, or perhaps a bit more, can help you keep your people. Speak to your local recruiter, to get an update on industry trends and keep your strategies updated. They have their finger on the pulse of the industries and locations they work in so can provide expert advice.

In conclusion, the debate whether money or development is more important to retain your people may not be as simple as it sounds, but it’s essential to understand the significance of both. Each business and it’s employees work differently, so recognise the needs of your employees and find the right balance to retain your workforce effectively.

Check out our latest Frontline Feel Good Index research report to find out what Aussie’s and Kiwi’s are prioritising in their careers.