“Opportunity is missed by most people because it is dressed in overalls and looks like work.” – Thomas Edison
Can money buy happiness? It’s an age-old question that has become particularly poignant as employers scramble to discover the magic motivator that will bring workers back to the workforce— and keep them working — during the “Great Resignation” and the approaching “Sansdemic.”Companies are raising wages, offering incentives, and awarding bonuses to lure job seekers and retain current employees. According to The Conference Board’s November survey, companies are setting aside 3.9% of their payroll budget for raises in 2022, the highest percentage since 2008. This might not seem like a lot, but it’s significant in two ways:
• The money will be used to raise existing employees’ salaries to keep pace with the increased new-hire rate.
• The raises are expected to span company levels, from entry-level to executives.
Wage growth accelerated dramatically as the economy reopened after the pandemic, and employers sought to replenish their workforces. After the prolonged period of uncertainty, it wasn’t as easy to hire as expected. Workers are hesitant to return to work for many reasons, among them:
- Lack of childcare
- Fear of illness
- Increased family responsibilities
- Need for flexibility
Organizations hired new employees at higher wages and are now discovering they must bridge the pay gap to keep their current staff from seeking “greener” pastures themselves.
Heightening the problem is the fact that there are more open jobs than workers available to fill them, a problem that isn’t going to go away as baby boomers retire and the birthrate trends downward.
Raising wages is a strong opening move in the war for talent. Money is a powerful motivator, especially when employers not only need to fill open roles, but they also need employees who will perform at a high level. Even those who proclaim money can’t buy happiness are willing to admit that it can provide a comfortable buffer against the world’s uncertainty.
Employers are discovering several ways that higher wages make employees happier, more loyal and more productive.
Compensation and benefits directly impact an employee’s performance and motivation to work. Compensation offered needs to be attractive enough to keep morale high. Paying employees well shows them they are appreciated and valued, key factors in employee happiness and satisfaction.
Employees who earn a fair wage tend to work harder. They are more likely to remain in their jobs because they feel they have more to lose. The perceived value of their job increases their desire to do good work and stay with the company.
Attract Qualified Workers
Most employees these days are aware of their market value and expect to be paid accordingly. If an employee feels they are underpaid or a competitor is offering better pay, they might jump ship. Money isn’t the only factor fueling a decision to change jobs, but it is significant. Offering a competitive wage can attract skilled, industrious workers to your organization.
Enable Better Health
Increasing wages can provide a higher standard of living for employees, enabling an overall improvement in good health.
Paying employees well often creates a desire for reciprocity. Employees who appreciate a raise work harder to “pay it back.” When workers are less concerned about money, they can focus on their projects, leading to higher productivity and a better quality of work.
Improve Your Employment Brand
Word gets around when employees are happy with their jobs. They are more likely to refer their company to their friends and post complimentary posts on social media. That can be good for your business! Paying your employees well and creating a positive work environment can bring more qualified candidates in the door.
Although it is still at the top of the list — money isn’t the only factor driving employee satisfaction. Employers that offer upskilling opportunities, clear career paths, employee recognition programs, and great benefits packages also reap the rewards of happy employees. In fact, many employers combine strategies to meet the needs of their employees: paying as well as they are able and offering other job perks that make their employees feel valued. Workers who feel appreciated and engaged with the mission and values of the business are happier, more loyal, and more productive, paying forward the investment their employers make in them by doing great work.