How can you increase employee retention without raising wages?

When it comes to attracting and retaining talent, offering competitive salaries can be crucial, especially when retention is many organizations’ number one current challenge. It can be a critical stumbling block in the not-for-profit sector, where wage caps mean they don’t have compensation as a negotiating factor.

Kathryn Minshew, CEO and founder of The Muse, has built her career around knowing the intricacies of recruitment and what it really takes to entice – and keep – top talent. She explained to HRD why money, while important, isn’t everything.

“There are a lot of factors that draw and keep people in jobs, other than compensation,” she said, and identified five key categories where businesses can be competitive for talent, other than wage.

Flexibility for employee retention

“Flexibility and work-life balance is coming up as the number one thing that employees and job seekers are looking for, above compensation,” Minshew said, in a recent video speaking with HRD.

In a recent survey conducted by The Muse, 83% of respondents said they would take a slightly lower paying job in order to receive measurably better work-life balance and flexibility, she said. These strategies can include flexible work schedules and creative hours.

“Giving people more autonomy and control is a very, very powerful way to attract great talent and to keep the talent that you have, if you can’t increase compensation,” said Minshew.

Increase employee retention with extended time off and learning opportunities

An “interesting benefit,” she said, is allowing longer-tenured employees to take extended time off, or sabbatical. This can look like several weeks or a month off, paid or unpaid, but the main benefit to employees is that they can leave for longer periods to travel or spend time with family, or pursue other career development opportunities, knowing that their job is safe.

“Especially since post-pandemic, there’s this real sense among a lot of people that life is short, so the ability to give your team that extended time off is really powerful,” Minshew said.

Additionally, providing employees with budgets for career development such as travel to conferences or courses can be seen as a valuable compensation in place of salary increases. If a company’s budget is very limited, she added, HR can provide set hours per month dedicated to learning.

“That also consistently comes up in the top five, or top three reasons people are looking to change jobs is they don’t feel developed, they don’t feel like they’re getting that learning and growth in their current role.”

Benefits and company culture

If in doubt about what benefits would be the most appropriate or valuable for employees, “ask,” Minshew said. “I think it can be a really great back and forth communication between an HR team and an employee base.”

Lastly, company culture is crucial for employee retention, she says, citing a recent The Muse survey which found that employees who described their workplaces as “disrespectful, non-inclusive, unethical or cutthroat” were less likely to be engaged with work and more likely to leave the job.

“I think there’s a really interesting element if an organization is looking to recruit or looking to retain, to really think about what is the environment you’re asking someone to join, and what is the environment that your current people are in? And can you make sure that it is more respectful, more inclusive, and perhaps doesn’t have some of those negative qualities.”

For more great insights, check out Minshew’s full video interview with HRD.