Is salary still enough to make employees stay?

For many years, salary has been treated as the most obvious answer to retention challenges. When employees were restless, businesses often looked first at pay rises, bonuses or counteroffers. While remuneration still matters, it is no longer the only factor shaping whether someone stays, leaves or starts looking elsewhere.

In today’s employment market, employees are taking a broader view of work. They want to know whether their role has a future, whether their manager supports them, whether their wellbeing is respected, and whether their workplace gives them room to grow. Pay may attract attention, but the day-to-day employee experience is what often determines long-term commitment.

This shift is especially clear in the 2026 Employment Market Report, where only 57% of employees rated salary and bonuses as a key factor in staying with an employer. Career opportunities ranked higher at 73%, while work-life balance followed closely at 72%. Management support and trust, job security, team relationships, company culture, and learning opportunities also ranked above salary, showing that retention is no longer driven by pay alone.

“Money just isn’t enough anymore.”

On a recent NZ Market Update, Host Shannon Barlow, NZ Managing Director, was joined by Guest Tash Pieterse, Certified People Leadership Coach, to discuss what employees now expect from work and how organisations can respond.

One of the key themes was that salary is often the easiest lever for employers to understand because it is clear and measurable. However, career development is more personal. It requires leaders to understand what each employee wants, where they are heading, and what kind of growth would keep them engaged. As Tash explained, people want to feel challenged, useful and capable. When they cannot see a pathway forward, they may begin to look outside the organisation.

This does not always mean promotion. In many businesses, a new title or senior role may not be immediately available. However, progression can still happen through stretch projects, new responsibilities, mentoring, secondments, specialised skill development or exposure to different areas of the business. The important part is that employees can see possibility. Without that sense of movement, salary can become the fallback issue.

Work-life balance is another major factor influencing retention. Since the rise of remote and hybrid working, many employees have seen that flexibility can support both productivity and wellbeing. For some, flexible hours or work-from-home options may be more valuable than a higher salary, particularly where commuting costs, family commitments or lifestyle needs are part of the decision.

For employers, this creates both a challenge and an opportunity. Not every organisation can offer the same level of flexibility, but those that can should consider how it fits into their employee value proposition. Flexibility should not be treated as an informal perk. It should be part of a wider strategy for attracting, retaining and supporting people.

The discussion also explored how learning and development can become more meaningful. Generic training programmes may look good on paper, but they do not always create real engagement. Employees are more likely to value development when it is personalised, connected to their goals, and aligned with where the organisation is heading.

This is particularly important as AI continues to influence roles and skill needs. Rather than allowing AI to create fear or uncertainty, businesses can involve employees in learning how to use new tools, improve processes and build future-ready skills. This can help people feel more confident, relevant and valuable in their roles.

A strong retention strategy begins with listening. Engagement surveys, regular check-ins and honest career conversations can help leaders understand what matters to their people. These insights are essential because employee priorities can change depending on life stage, career stage and personal circumstances.

The most effective organisations will not rely on one single retention lever. They will pay fairly, offer growth, support flexibility, build trust, and create a culture where employees feel seen and supported. Salary still matters, but it is only one part of a much bigger picture.

How can employers improve retention beyond salary?

• Pay fair and competitive market rates so salary does not become a reason for employees to leave.
• Have regular career conversations to understand each person’s goals, interests and next steps.
• Create progression opportunities through projects, skill-building, mentoring or exposure to new areas, even when promotions are not available.
• Use flexibility strategically as part of the employee value proposition, where it suits the role and business.
• Make learning and development personal, practical and linked to both employee goals and business needs.
• Listen to employee feedback and act on it, rather than relying on assumptions about what people value.