Pay is key to recruitment and retention

Pay has a critical influence on recruitment and retention, but is much less important in driving employee engagement levels, according to a survey of UK workers from Employee Benefits¹.

The survey is based on responses from 3,142 working adults surveyed online by YouGov on behalf of Employee Benefits in February 2008.

Surveyed workers identify pay as by far the biggest factor influencing their recruitment decisions. It is mentioned as such by almost three-quarters (74%) of respondents, around three times the proportion citing the next most common factors: location (27%) and career development opportunities (25%).

Pay is also the key factor influencing retention, cited by 44%. It is closely followed by "the people I work with" (mentioned by 42%), then location (34%).

In contrast, pay ranks as only the seventh most important factor affecting engagement with employers, mentioned by just over half (51%) of workers. The three most important factors driving engagement are: interesting work (according to 69%); work-life balance (58%); and working environment (57%).

However, an increase in pay is identified as the primary factor that would boost engagement levels among respondents, mentioned by more than two-thirds (68%). This is followed by the options to work flexible hours (60%) and to work from home (47%).

The survey notes that last year's Employee Benefits survey indicated that: "Benefits strategy is inextricably linked to recruitment and retention in the minds of most HR experts." The 2008 survey suggests that this view is not widely shared by UK workers. Only one in 10 (10%) respondents says benefits offerings would influence the decision whether to stay with their employer, while one in five (21%) identifies benefits as a decisive factor in changing jobs.

Overall, the survey finds that employee engagement levels are reasonably high, if not exceptional. Just under three-fifths (57%) of employees say they are fully engaged in their work, while around half (49%) say they feel fully engaged with their organisation.

There are striking parallels between the findings of the Employee Benefits survey and recent research into pay and engagement from Towers Perrin. Towers Perrin found that while competitive base pay is the top driver attracting UK employees to an organisation, pay does not appear among the top 10 drivers of employee engagement.

1. The Employee Benefits Research 2008 (external website), Employee Benefits, free.