MONEY MATTERS – Pay, Life Issues Outrank Benefits in Attracting Employees

June 29, 2000 ( - While 80% of hiring managers at smaller employers believe benefits to be the key consideration in attracting employees, just 24% of employees confirm that opinion.

The number one reason (62%) to jump ship remains better pay, according to a small business survey by Sage Software, a provider of accounting and business management software. When asked, nearly 95% of departing employees offered a surprisingly consistent list of reasons for that decision, topped by pay, career change (49%), lifestyle change (41%) and benefits (24%). 


Despite the difficulty in retaining/training current employees, just 27% of employers are willing to make a counter offer to a resigning employee. Twenty percent say that competitors have successfully targeted their employees, while 30% are directly targeting their competitors.

Behavior Shifts

With one in five employers struggling to keep current employees, a like number have opted to change their behaviors over the past year. Of those making changes,

  • 66% now offer more promotions
  • 61% have increased salaries
  • 32% have instituted an employee bonus plan
  • 22% have instituted new flex-time policies
  • 7% have enhanced child-care options
  • 5% now allow employees to work from home

Over half of the 200 employers surveyed have changed their recruiting strategies over the past year, with:

  • 51% now using the Internet to recruit
  • 49% have increased advertising
  • 42% are offering higher salaries (38% offering 10% higher than just 6 months ago)
  • 42% are offering higher signing bonuses (about 8%, on average)
  • 37% have increased the use of professional recruiters

In most cases the survey found that retaining employees accounts for an average of 8% of senior executives’ time, compared with 6% focused on recruiting.

The findings were a result of a survey of more than 200 small business human resource managers, directors and officers responsible for personnel recruitment and retention.