Pay Them More and They’ll Stay

“Well, if you just give her a pay rise, she’ll stay on”.

“Harry is going to leave unless he gets more money”.

“This year we are going to give everyone a salary increase above the going rate. That will make them happy and improve our retention rate”.

How many times have you heard these or similar statements at your workplace? In fact, the evidence just does not support this thinking.

Across decades of organisational psychology and HR research, the single strongest reason people stay with an organisation is their direct manager, not pay. Pay matters, however, it is not the primary driver of loyalty.

Here’s a summary of the main reasons employees choose to stay with a company, roughly in order of importance.

1. THE DIRECT MANAGER (Most Important)

People don’t stay for companies; they stay for leaders they trust and in particular their direct Manager.

Employees stay when their manager:

Treats them with respect and fairness.
Listens and takes their views seriously.
Provides clear expectations and feedback.
Supports them when the going gets tough and when other departments challenge them.

A poor manager is one of the strongest predictors of turnover — even in well-paid roles.

Academic work by Harter, Schmidt, Hayes, Mitchell, Holtom, Lee, Sablynski, & Erez, all support this view.

2. MEANINGFUL WORK & PURPOSE

People stay when their work:

Feels useful, valuable, or makes a difference.
Aligns with their personal values.
Can be seen to have a clear connection to outcomes or a broader company goal.

When work feels pointless or disconnected from purpose, disengagement rises rapidly, regardless of renumeration.

3. GROWTH, LEARNING & CAREER DEVELOPMENT

Employees stay when they can see a future.

This includes:

Opportunities to learn new skills.
Career progression.
Stretch assignments.
Trust from their manager by asking them to take on more responsibility.
Mentoring or coaching.

People leave when they feel “stuck”, even if they are comfortable.

4. PSYCHOLOGICAL SAFETY & TRUST

People stay where it feels safe and they are trusted.
This means:

Speaking up without fear of punishment. Their opinions are valued.
Making mistakes without humiliation. The key here is addressing the mistake itself and not attacking the person who made it.
Being themselves (personality, background, thinking style).
Fair treatment and consistency; no workplace “favorites.”

High-trust environments significantly outperform low-trust ones on retention. Refer to Ryan, & Deci.

5. RECOGNITION AND APPRECIATION

People stay where they feel seen.

This is not just bonuses:

Genuine thanks from managers. A small token, even a simple email counts a great deal.
Feeling that contributions are noticed and valued.

Lack of recognition is a common reason for “quiet disengagement”. Refer to W.A. Kahn

6. TEAM RELATIONSHIPS & BELONGING

Work is social.

Employees stay when they:

Like and respect their colleagues.
Feel a sense of belonging. They are included in all that happens in an organisation.
Are part of a team that supports each other.

Strong peer relationships often offset stress and workload.

7. FAIR AND ADEQUATE PAY (Important, but Not #1)

Pay must feel:

Fair relative to the role and market.
Equitable compared to peers.

Once pay reaches “fair and adequate”, its power to retain drops sharply.

Unfair pay drives exits; fair pay alone rarely creates loyalty.

8. FLEXIBILITY AND WORK-LIFE BALANCE

This is increasingly important, especially amongst the younger generations.

People stay when:

Work arrangements respect life outside work, including those with young families.
Burnout is actively managed.

Rigid environments see higher attrition, especially among experienced staff.

9. ORGANISATIONAL VALUES & INTEGRITY

For members of the younger generations this can be a key factor and one they will actively seek out or ask in recruitment interviews.

Employees stay when:

Leaders act consistently with stated values.
Those values align with the employee’s own, including broader social values.
Decisions feel ethical and principled.

There is confidence in the organisation’s direction: uncertainty increases turnover even among engaged employees.

In One Sentence – People stay where they feel respected, supported, aligned, and valued – and where there is mutual trust between them and their manager.

Stoke Consulting

Some References:
Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychological Inquiry, 11(4), 227–268.
Gallup. (2023). State of the global workplace: 2023 report. Gallup Press.

Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 87(2), 268–279.
Mitchell, T. R., Holtom, B. C., Lee, T. W., Sablynski, C. J., & Erez, M. (2001). Why people stay: Using job embeddedness to predict voluntary turnover. Academy of Management Journal, 44(6), 1102–1121. https://doi.org/10.2307/3069391
Ryan, R. M., & Deci, E. L. (2017). Self-determination theory: Basic psychological needs in motivation, development, and wellness. New York, NY: Guilford Press.
Schein, E. H., & Schein, P. A. (2017). Organizational culture and leadership (5th ed.). Hoboken, NJ: Wiley.
Schaufeli, W. B., & Bakker, A. B. (2004). Job demands, job resources, and their relationship with burnout and engagement: A multi-sample study. Journal of Organizational Behavior, 25(3), 293–315.

Blau, P. M. (1964). Exchange and power in social life. New York, NY: Wiley.
Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, 33(4), 692–724. https://doi.org/10.2307/256287