Gallagher research finds workers want more than a good salary

New research finds a growing gap in perceptions between employees and employers.

James Allen, Gallagher.

High pay may help you hire workers in a tight labour market but it won’t necessarily help you retain them, according to organisational psychologist James Allen. That’s because today’s employees are more forthright about articulating the necessity for companies to meet their needs for meaning, purpose and wellbeing at work.

Allen, who was the lead researcher on work by consulting and risk management firm Gallagher, says the big shift in recent years – one fast-tracked by Covid-19 and hybrid work – is personalisation of work and heightened expectations about issues such as flexibility.

That means managers need to be on their game in a way that wasn’t so crucial in a high-unemployment market. Yet the Gallagher research found a growing gap between how the boss sees the workplace and how it’s experienced by their employees.

Allen, who is director, people experience and innovation at Gallagher, agrees a gap in employer and employee perceptions is nothing new but suggests it’s more intense now because of the personalisation of work when executives are keen to exert their control in the wake of Covid-19. One example of the clash happens when bosses try to bring people back to the office but employees don’t actually see the benefit to their wellbeing.

The 2023 Workforce Trends Report released by Gallagher on Saturday argues it’s the executives who are far likelier to report positive working environments than all other parts of the business.

“This poses a top-down issue where junior and mid-level employees may be calling for organisational improvements, but senior staff don’t see it as necessary and either don’t see the signs or do see the signs but don’t action change,” the report says.

It finds a drop in employees experiencing workplace wellbeing since last year from 52 per cent to 48 per cent, but only one-third of businesses are listening to feedback on wellbeing and bringing about change. Another third are listening and not effecting change, and one-third are not even listening.

Allen says employers now have access to technology to “listen” by receiving real-time feedback on the views and desires of their employees that allows them to really understand what is shaping their experience.

“We know there are differences across these different groups or segments of employees and that one-size-fits-all approach that traditionally has been used by employers and organisations … is only going to be beneficial to a small proportion of people,” he says. “Technology … allows us to get a more accurate read of what’s actually happening … we’re not looking at things in the rear-view mirror as much as what we were previously. We’re looking at it right here, right now. And really productive or leading organisations are then able to act on that a lot faster.”

Allen says “we certainly can’t dismiss salary as being important and it’s certainly front of mind for people right now … people are indicating salary is important when they’re considering joining a new employer but, if we dig deeper, what we know and our research certainly supports is that when we’re looking at the retention of employees, salary and pay doesn’t really enter into those top factors that contribute.

“It’s far more around the connection to purpose, having meaningful work, in what people can actually do in their work, and factors about how change is managed and a range of other things around supporting their leader.

“So these are arguably less superficial; they require greater attention, they might change over a longer period of time, but they’re really the factors that actually contributed to whether or not someone will stay with an organisation.”

Allen stresses that companies need to ensure they provide the “hygiene factor or fundamental need to have a wage or a salary that allows you to meet your own personal needs”.

But “salary doesn’t provide a strong connection around motivation, commitment and actually whether or not someone will stay with an organisation”.

“So that’s what we’re really fighting for here in the context of providing people with a long-term career, that sense of purpose and leadership that is supportive,” he says. “They’re the factors that are actually going to ensure someone stays.

“These elements have probably always been there in some way, but we’re better able to understand and measure them and actually see that it played out in the real world. That’s allowed us to get a greater sense of the importance of them and how they actually contribute to someone’s experience at work.”

He says executives and decision-makers within organisations need to be aware of their own potential bias when making a decision.

Allen says: “They need to be able to really create feedback mechanisms, listening strategies with their employees so that they can collect meaningful and valid data that allows them to really understand where the pain points are for their workforce, and then use that to really inform meaningful and targeted action.”

Allen says the obligation on employers to ensure wellbeing and mental health of employees is being embedded in state and federal legislation. They are required to be proactive in ensuring the psychosocial health of employees, not just react to cases of mental ill health.

He says it’s important for companies to survey and gather information and views from employees but it is also vital for employees to see real action based on that data.

“Beyond whether it’s anonymous or identifiable, the critical factor that builds trust and increases the likelihood that people will be honest (in answering surveys) is what comes after that data collection, regardless of mechanisms, whether it’s a survey, a focus group,” he says. “If an organisation asks for feedback but does nothing, that is the No.1 factor that will erode people’s trust.

“Organisations need to think beyond just the collection and gathering of that feedback to what is the strategy around how are they going to act and follow through.”

Allen says there is now a great opportunity for organisations to take a genuine interest in staff wellbeing and deliver an impact beyond the bottom line.

“We can talk about that impact in the sense that higher wellbeing contributes to more engaged employees, more productive employees, but it has a broader societal impact as well,” he says. “We can see reductions in mental health claims and factors that extend beyond an individual or an individual organisation.”

He says that while interest in workers is sometimes seen as companies pursuing a softer approach, such strategies have a real financial impact.

“Organisations that are aware of both sides of that equation are the ones that are going to get the most impact and results from taking a proactive approach,” he says.