Is Compensation Fueling Your Turnover
When Good People Leave, Pay May Be Sending the Wrong Message
Turnover is expensive and disruptive. Especially for small and mid-sized companies where each person carries significant weight. But when a key team member walks away, how do you know if pay was part of the reason?
Often, compensation doesn’t top the exit interview list, but it lingers beneath the surface. Subtle imbalances can erode loyalty over time, especially when employees start comparing notes or offers.
Warning Signs You Shouldn’t Ignore
Sometimes the clues are loud: a top performer exits for “a slightly better offer.” Other times, they’re more muted, like a long-time employee becoming disengaged, or the team grumbling when a new hire comes in at a higher rate.
In one case, a client was losing supervisors despite having solid leadership, good flexibility, and a strong team culture. It wasn’t until we stepped back and looked at the overall picture that a misalignment in compensation came into focus. Small adjustments—nothing radical—led to a significant improvement in retention within a year.
It’s Not Always About More Money
Fixing pay-related turnover doesn’t mean throwing money at the problem. It means getting a better understanding of the message your compensation is sending, and whether that message reflects how you actually value people.
This can involve reinforcing pay fairness, recognizing tenure or key skills in meaningful ways, or simply recalibrating areas that have fallen behind the market over time.
The Broader Context
Pay alone doesn’t keep people. But it often influences how they interpret everything else, such as leadership, opportunity, appreciation. It is one of the few signals every employee notices every payday.
When your compensation approach is intentional and aligned, it becomes part of the reason people stay, not the excuse they use to leave.
If you’re losing good people, or just tired of guessing what’s driving the exits, it might be time to take a fresh look at what your pay strategy is really saying.
Contact me if you’d like to talk about how this applies to your team.
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