Pay is one of the least likely incentives for staff moving on and factors such as a better work-life balance and a better working environment are more important than higher salaries, according to a study by BrightHR.
The lure of an easier role (39 per cent), a better work-life balance (38 per cent) or a better work environment or culture (34 per cent) are seen as more significant factors than higher pay (21 per cent).
A company with better leadership (21 per cent) and more recognition and rewards (6 per cent) are additional incentives.
Business leaders believe the biggest financial costs caused by staff turnover is a loss of clients (45 per cent), cost of lost output (41 per cent), retraining fees (7 per cent) and recruitment fees (6 per cent).
The biggest non-monetary effects are time in training, continuity in knowledge and work practice, client confidence/impact on brand and staff morale.
The results underline how, as the lines between work and home life have become blurred, employees want more flexibility in their work lives.
Flexible working over higher salaries
As a result, employers need to put less focus on cash incentives such as bonuses and offer policies such as flexible working as perks, allowing workers to achieve a better work-life balance.
Building a culture of trust that embraces workplace fun improves innovation, boosts morale, reduces absenteeism and staff churn whilst increasing productivity and profitability, according to BrightHR.
Paul Tooth, co-founder of the organisation says, ‘We’ve argued that employers should pay workers the market rate, or slightly more, in order to keep them engaged and stop them looking for another role.
‘Clearly, however, employees leave companies for many different reasons. What this research reveals is that employers do not regard higher salaries as one of the main factors for staff moving on.’
‘Companies who want to retain staff and reduce turnover costs should look at ways to achieve a happier, more inspired and more committed workforce.’