Acquiring and retaining human capital is crucial for an organisation’s growth and success in a world where there is a constant war for talent. So, does salary become the most compelling tool for employee acquisition and retention? This is a topic of continuous debate and deliberation amongst employers; a dilemma that seldom resolves.
It seems that a satisfactory salary to hire and retain is an elusive global phenomenon. Even in the Middle East and North Africa regions, a significant 70% of professionals believe they are underpaid, with UAE professionals being the most underwhelmed lot by their incomes.
If we consider that cracking the desirable salary is the key to hiring and retaining talent, the booming Indian start-up industry gets us thinking. For the Indian start-up industry is a very good paymaster. A whopping 82% start-ups pay above the market median and yet they have a high attrition rate of 21%. Surprisingly, the most common reason for attrition is pay. Likewise, even in the Indian IT sector, employees were satisfied with their peers and bosses but dissatisfied with their wages, as revealed by the Monster Salary Index Report with WageIndex and IIM Ahmedabad. This is despite the fact that they enjoy the privilege of slightly higher bonuses as compared to the national average.
So, how much salary is good enough to acquire and retain talent even in the best-paying sectors? This is a dichotomy that resonates across economies and sectors.
Dig deeper and one starts unveiling the layered factors responsible for hiring and retention and their relationship with salary. It is important to find out what actually matters to an employee to come on board and then not quit sooner or later? Is it primarily money or do other intangible factors edge their way into making this decision?
A majority of people in the West have confessed that though salary tops the list of employer selection criteria, money isn’t everything. A good career opportunity is also high on the list, followed by benefits such as a good working atmosphere, a good work/life balance and a challenging job.
Similarly, in India, South-East Asia and Middle East job markets, the value at work is not just limited to money. A bunch of factors also come up such as job security, career advancement, base pay and title, learning and development, and the reputation of the organisation. Thus, salary is not just the reason that attracts talent but it is always