Beyond the Price Tag: The Stone Truth About What Really Attracts Top Talent
Are you tired of losing your best employees to competitors? It’s time to rethink the traditional (and unevidenced) notion that “you have to pay market rates to attract good people”. Simply offering more money will likely attract mercenaries rather than loyal and committed employees. So, what can companies do to attract and retain people? Let’s explore the factors that truly matter in building a team of dedicated and passionate people who will help drive your company’s success.
The idea that “you have to pay market rates to attract good people” is widely accepted in the business world. The basic premise of this argument is that in order to attract the best talent, companies must offer competitive compensation packages that reflect the current market rates. This is because highly skilled and qualified individuals are in high demand, and will often receive multiple job offers from different companies. As a result, companies that offer below-market compensation packages are unlikely to attract the most talented candidates.
“If all you have is a hammer…”. Compensation is that hammer.
However the stone truth is that simply paying market rates is totally inadequate to engage and motivate. This is because individuals who are primarily motivated by money are mercenaries – individuals who are willing to work for the highest bidder, without any loyalty or commitment to the company or its values.
In this sense, paying at or above market rates will attract mercenaries rather than truly committed and loyal employees. Mercenaries may be skilled and talented, but will lack the long-term commitment and dedication that companies need to succeed in the longer run. By definition, mercenaries are primarily motivated by financial gain, and will quickly jump ship to another company if they receive a better offer.
Therefore, companies might choose to consider factors besides compensation, such as company culture, opportunities for growth and development, and a strong sense of purpose and mission. By offering a more holistic package that goes beyond mere financial compensation, companies can attract employees who are not just in it for the money, but are engaged with the company’s long-term success. A policy of hiring mercenaries also lowers the workforce’s esprit de corps.
Finally, there’s Deming’s 95:5. Deming’s 95:5 rule states that 95% of productivity in any organisation results from the system or process, while only 5% is down to individual talent. This principle has important implications for the idea of paying market rates. By focusing on the 95%, rather than the 5% represented by individual employees, “best talent” becomes next to irrelevant. Ultimately, the success of a company depends on the strength of the entire organisational system, rather than the individual skills and talents of its employees. Where’s the bigger payback?