Your Competitor May Be Able to Outpay You. Don’t Let Them Out-Experience You Too.
“We’re losing good people because another company can pay them more.” I hear some version of that sentence from leaders everywhere. And sometimes, it is absolutely true. Compensation matters.
In fact, the
National Workplace Trends Study found that American workers overwhelmingly identify regular opportunities to increase pay as the most important aspect of positive growth opportunities.
So let’s get one thing straight right now:
You cannot culture your way out of chronically underpaying people.
But there is another mistake leaders make. They assume that when an employee leaves for more money, money was the only thing that employee was comparing. It rarely works that neatly.
What Else Are Employees Comparing?
Imagine one of your best employees gets a call from a competitor. The salary is higher. Now what? That employee is not simply comparing two numbers on a paycheck. They’re comparing two versions of their work life.
Who will lead me?
Will I be trusted?
Will I have opportunities to grow?
Will my work matter?
Will great work be recognized?
Will I respect the people around me?
Will I have a team I want to be part of?
Will this job make my life better or worse?
That is why employee experience cannot be treated like an HR extra. It is part of the value people receive in exchange for choosing to work for you.
52% Would Take Less Money for the Right Leader
The National Workplace Trends Study found that 52% of working Americans would take a lower-paying job to work for a boss they loved. That does not mean compensation stops mattering.
It means leadership has value.
Trust has value.
Respect has value.
Growth has value.
Purpose has value.
Belonging has value.
And when people are deciding whether to stay or go, those experiences are part of the equation.
Stop Treating Employee Experience Like an HR Perk
A strong employee experience is not about making everyone happy all the time. It is about building a workplace where great people can do great work, grow, contribute, trust their leaders, feel connected to the mission, and want to stay.
The
National Workplace Trends Study identifies five areas of the employee experience that help create a Destination Workplace® — where people want to apply, engage, contribute, promote, and stay:
- Culture
- Growth Opportunities
- Leadership
- Team and Belonging
- Well Being
Those are not decorations around the real work. They ARE part of the work of building a Destination Workplace®.
The Question Isn’t Whether You Pay People OR Treat Them Well
This is not an either-or conversation. Pay people competitively. And build an experience worth staying for.
Some organizations will never be able to outpay the biggest employer in their market. School districts, government agencies, nonprofits, and small or mid-sized companies often know that reality very well. But they can still control what it feels like to work there, and that can oftentimes become their competitive advantage.
They can control the quality of leadership.
They can create meaningful growth.
They can recognize contribution.
They can build trust.
They can connect people to purpose.
They can create a team people are proud to be part of.
Give Your Bar Raisers™ Something Worth Staying For
Your Bar Raisers™ are valuable. They are the biggest contributors in your organization. Assume other organizations want them. Then build the kind of workplace they don’t want to leave. Not because you expect loyalty without earning it. Because you have created an experience where strong leadership, meaningful work, growth, great teammates, high standards, and competitive compensation come together. That total experience is much harder to walk away from.
So here is the question I want every leadership team to answer:
If your competitor offered one of your Bar Raisers™ 10% more tomorrow, what about their experience with your company would make leaving genuinely difficult?
Compensation gets compared. Experiences get remembered.
Pay has to be competitive. The experience has to be compelling.
And remember:
You may not be able to outpay your competitors. But you cannot afford to let them outpay you AND out-experience you.
About Betsy Allen Manning
Betsy Allen-Manning is the wake-up call you didn’t know you needed. She’s a high-energy leadership keynote speaker and creator of the Bar Raisers™ Movement: a proprietary system redefining how organizations are approaching performance, leadership, and culture. Featured on FOX, CBS, NBC, ABC, and TEDx, Betsy works with organizations across corporate, franchise, association, nonprofit, and government sectors. She’s the lead researcher behind the National Workplace Trends Study, and delivers programs around her Bar Raisers™ and Leadership Mastery frameworks. She is the founder of Destination Workplace®, an award-winning leadership development firm in Dallas, Texas.
FAQ
Does compensation affect employee retention?
Yes. Competitive compensation matters. The National Workplace Trends Study found that regular opportunities to increase pay are an important part of the employee experience. Strong culture should never be used as an excuse to chronically underpay employees.
Can employee experience improve employee retention?
Employee experience can influence whether people want to stay. Leadership, growth, trust, recognition, purpose, belonging, and the quality of the day to day workplace all contribute to what an employee experiences beyond the paycheck.
Why does leadership matter for employee retention?
Leadership shapes the day to day employee experience. The National Workplace Trends Study found that 52% of working Americans would take a lower paying job to work for a boss they loved. That does not make compensation irrelevant. It shows that the quality of leadership carries real value for employees.
What is a Destination Workplace®?
A Destination Workplace® is a workplace where great people want to join, contribute, and stay. Betsy Allen Manning helps organizations build Destination Workplaces® by developing stronger leaders, improving the employee experience, and creating Bar Raisers™ who elevate the standards around them.
How can organizations compete for talent when they cannot offer the highest salaries?
Start by paying as competitively as the organization reasonably can, then examine the total employee experience. Leadership, growth, trust, recognition, meaningful work, belonging, and the quality of the team can all become important parts of an organization’s talent and retention strategy.
