Why Conversations on Money are Important for Retention

Let's talk about money.

We all need it. We all want it. And we all have to make it.

So, why is it so hard to talk about it in the workplace?

Easy - because it's personal:

  • It reflects our efforts and abilities.
  • It impacts how we see our own worth.
  • It influences our personal lives, whether that's making ends meet or deciding if the family is going on a vacation.
  • It affects our feelings about our workplace, co-workers, jeez - even our life choices that brought us here.

Pretty heavy stuff. So how can you, as a human resources leader, help managers and employees navigate this topic? Our advice: Bring it up more often.

Here's why.

It Minimizes Surprises

Security and continuity are important parts of employment. The best companies inject some empathy into their business modeling, and one way to do that is to minimize the mystery behind what you're bringing to the table.

  • Put compensation information in the job description and mention it early in interviews. Putting pay upfront increases transparency, sets the tone for the level of work required, allows for focuses on company fit and avoids wasting applicants' time or your own.
  • Have hard numbers about market worth and performance. Continual progress reviews mean continual metrics, which should be tracked in a meaningful way through automated employee review software (it’s hard to get a comprehensive view with stacks of paper).
  • Kick off the year with money talk. Lay out exactly what kind of raises or bonuses an employee can earn if they hit their goals - or what happens if they don't.

Techniques to Retain Top Talent Whitepaper

It Normalizes Money Talk

If you're only talking about money once a year, you're putting a lot of pressure on all parties. First off, you should be doing progress reviews way more often than annually, and they should include check-ins about money.

  • Performance reviews should be about performance. When employees believe the next year of livelihood is going to be decided here, it's hard to focus on the feedback and not the dollar signs. Give your employees the gift of quality, two-way conversation about performance, and leave money talk for another scheduled time.
  • Talk money goals, expectations and aspirations - knowledgeably. Only 37 percent of employees have confidence in their managers' ability to explain pay decisions. Come prepared for money matters.

It Builds Trust

Transparency and fairness are key drivers to employee satisfaction. According to PayScale, the top five reasons for raises are performance, retention, market adjustment, cost-of-living adjustments and internal pay inequities.

  • Be candid. Managers should be able to talk compensation honestly, openly and with objective measurements to back up the decisions. Share company performance, competitive threats and the outlook for future pay decisions.
  • Ask the employee about their expectations for future raises and bonuses. By creating a conversation rather than a directive, managers let employees be heard and give them reason to objectively reflect on themselves.
  • Bring in more insight. If possible, managers should work on money matters with another decision-maker to help pummel any biases. This helps employees see the process as fairer and the decision more robust.

It Shows You Get It: Money Isn't Everything, But It Matters

Employees want to feel like part of a larger mission - that their work is part of a team effort and matters in the big picture.

  • Tell them you value them. Whether their earnings are going up, down or staying the same, don't let the pay define their work. Make it clear their hard work, commitment to the company and expertise is valued.
  • Be an active listener. Show your employee empathy and compassion when talking money. It feels very personal, but often the true topic is something other than finances. Make sure you're hearing them about advancement, autonomy and work-life balance.
  • Understand that compensation is just a piece of the employee happiness puzzle. Two out of three reasons employees voluntarily leave their jobs have nothing to do with money: career growth opportunities and dislike of managers factor are cited just as often. Make sure these important factors are being addressed as well through training opportunities and calculated promotion planning.

 Retaining Employees Guide Whitepaper