In today’s challenging hiring environment, understanding what motivates your employees to stay with you is vital.
When you know what attracts and retains valuable team members, you can design your compensation packages accordingly. But this understanding doesn’t just affect how you hire new employees and hang onto existing ones.
Having a clear idea of what motivates your staff members helps to increase engagement and productivity. It shapes your working culture, encouraging you to create environments where creativity and collaboration thrive. And it gives you an advantage over your competitors when it comes to attracting new talent into your organization.
Of course, the salary and benefits package will play a role in whether or not people want to work for your company. However, there’s something harder to define that might be even more valuable to your team members – a sense of purpose and meaning in their work.
In this two part blog post, we’ll take a look at the research into why people stay in their jobs and what causes them to leave. In part one, we’ll examine the case for offering better perks and discuss the evidence behind the value of a sense of purpose for retaining and motivating employees.
Then in part two, we’ll look at some ways that leaders and managers can create a working environment that encourages employees to find value and meaning in their work.
The Value of Purpose at Work
The average person will spend around 90,000 hours at work over the course of their lifetime. That’s a hefty chunk of our lives, so it is perhaps no surprise that work plays a significant role in our sense of identity and purpose.
Our employees expect their work to provide them with meaning and purpose. They want to feel valued and to know that their efforts have an impact. Indeed, according to research by McKinsey, 70% of employees say that their sense of purpose is defined by their work.
This finding also holds true at all levels of an organization. While the senior executives in McKinsey’s research sample did push the average upward, two-thirds of non-executives also agreed that their purpose is defined by work.
Sadly, McKinsey’s survey also found that many people aren’t getting the meaning they want from their work, especially if they are lower down the organization’s hierarchy. Only 15% of frontline staff and managers said that they live their purpose at work – a challenge for senior leaders who want to encourage engagement and motivation across all levels of the organization.
When people don’t have this sense of purpose at work, they quickly become disconnected and demotivated. In contrast, employees who say they have purpose in their day-to-day work score higher on engagement, achievement, excitement, and satisfaction in their jobs.
In other words, when your employees find meaning in their work, they perform better. They are more engaged, more productive, and less likely to leave for another company.
Research also indicates that people who have a sense of purpose at work have fewer absences and work longer hours. They are more likely to occupy senior positions and are more likely to be promoted too.
What About Perks?
The evidence overwhelmingly shows that fostering a sense of purpose and meaning in the workplace is vital to employee satisfaction and engagement. But does purpose really play an equal or greater role than the perks we offer our staff members?
The answer is a qualified yes. Of course, there is a baseline to consider here. If you are offering significantly fewer perks than your competitors, purpose may not be enough to keep your employees with you.
But we only need to look at the non-profit sector to see how big an impact purpose can have on people’s career choices.
Although salaries in the non-profit sector typically track below salaries for the commercial sector, non-profits employ around 10% of the U.S. workforce, making this the third largest workforce – coming behind retail and manufacturing.
Working for a cause they believe in is clearly a high motivator for many people in America. And this remains true among people who opt to work in the commercial sector too.
According to research published in the Harvard Business Review, a whopping 9 out of 10 people are willing to earn less across their lifetimes if it means they can have a better sense of meaning at work. On average, respondents were willing to take a 23% cut in future earnings in order to have a job that felt consistently meaningful.
In contrast, pay levels show little correlation with employee satisfaction. Research indicates that higher wages are only minimally associated with higher levels of satisfaction at work.
What does matter, according to research by Glassdoor, is how the person aligns with the culture and values of the organization. Indeed, their survey found that compensation and benefits consistently came out as the least important factor in workplace satisfaction.
Of course, money isn’t the only perk we can offer employees. There are other benefits, such as flexible working agreements, health insurance, and help with childcare costs that may make more of a difference to how attractive your company is to your team members.
For example, one 2022 survey found that two-thirds of employees rank work-life balance at the top of their priority list – above pay and benefits and above a sense of meaning and purpose.
There’s further evidence to suggest that perks like these are more valuable to employees than higher pay. A 2015 study by Glassdoor found that 80% of employees would choose additional benefits over a pay raise.
Top of the list of desirable benefits in 2015 were healthcare insurance, paid time off, and a performance bonus. But, of course, the world has changed radically since then.
Research into what people want from their jobs in 2023 suggests that basics like healthcare insurance and paid leave are still important to employees. However, people increasingly expect to see flexible working and family care benefits as part of their employment package.
The 2022 SHRM Employee Benefits Survey?saw 70% of responders rate flexible working as an important workplace benefit. Family care ranked highly too, with 70% also saying that it is an important or very important perk.
Both ranked more highly than financial benefits and opportunities for career development, showing that it is the ability to balance life and work that is often the most attractive benefit companies can offer their employees.
What This Means for Employers
As we’ve seen, it isn’t a straight-cut choice between offering perks and attempting to make working for your company more meaningful. Ideally, your company will take a 360-view of employee experience, looking at your workplace culture as well as the benefits you offer your staff.
What is clear is that pay is not the deciding factor as to whether you attract and retain great people. As long as your salary offer is fair and consistent with your sector, it is far more important that your employees feel valued and purposeful at work.
No amount of money can compensate for work that feels meaningless and goes unappreciated. But when you strive to create a workplace culture that fosters a sense of purpose and value in your employees, you will see rewards in productivity, engagement, and retention.
This presents a challenge to managers and senior leaders. Offering an attractive benefits package is relatively simple in comparison, as it remains wholly within the company’s control.
In contrast, finding a sense of purpose is an individual matter that is driven by each employee’s values, motivations, and beliefs.
Although we can’t control how much meaning each of our staff members finds in their work, there are some things that we can do to create a culture where meaning and purpose are prioritized. In the next part of this blog post, we’ll look at these strategies in more detail.