How Much Does Salary Matter?

How much of a bump in salary would it take to get you to accept a new job?

While everyone’s number is different, it’s clear that salary matters. A recent article points out that lack of meaningful wage growth is one of the main reasons workers switch jobs.

But wages are only part of the story.

The same article notes that engaged employees are far less likely to jump ship for a job with higher pay. Recent research finds that among employees who are “fully engaged,” 37% would consider switching jobs for a raise of 20% or less – compared to 54% of employees who are “actively disengaged.”

Employers can take a few lessons from this and similar studies –

Pay matters – up to a point: Employees need to be paid competitively, but also need to feel connected to their work and the organization for reasons that go beyond the paycheck.

Benefits matter – and not just traditional benefits: As with cash compensation, employees expect a certain baseline when it comes to benefits, but beyond the basics such as health insurance and retirement benefits, employers should be looking at other benefits – such as financial wellness and opportunities for education and professional development -  that employees consistently say that they value.

Communicate: Make sure that employees are fully aware of the total rewards package the organization provides. Total compensation statements are an excellent tool to use to increase employee awareness and appreciation of the breadth and depth of an organization’s rewards programs. 

Expanding the Definition of Total Rewards

Anisha Archary, the Human Resources Director of Old Mutual Emerging Markets, published an excellent blog post over the weekend that describes her organization's view of total rewards. It's an expansive, comprehensive view that other employers should take note of.

In her post, she outlines a broad idea of how to define total compensation. Total compensation should be, in her words:

a multi-dimensional employee value proposition, which includes culture, leadership development, talent management, community work and an opportunity to develop a career. For us, benefits are more than monetary reward. We know that money is important to employees, but also understand that people work for more than money. 

In other words, cash compensation and traditional benefits are of course extremely important, but there are many other aspects of the overall workplace experience that are critical for employee engagement and retention.