How to keep your best people: Managers or money?


In our challenging labour market, employee engagement is critical. This is especially true in scientific, technical, and engineering fields where the talent pool is shrinking.1 Since competition for skilled employees is rife, there’s a risk that employers jump to the most obvious, but not the most effective, incentive: money.  However, attracting talent is actually more about how a business is run, and how people are treated within an organisation. And research reveals that the behaviour of managers is a critical factor in both retaining and engaging the best people.

Research from the Corporate Executive Board2 has identified the factors that both attract people to potential employers and the factors that are most likely to cause them to leave. What UK candidates consider most important is actually work-life balance, with 53.7% ranking this in their five most important criteria. Compensation was down in 6th place.

Here are the top 10 factors attracting employees to an organisation (figure is the % employees ranking the attribute as one of their top five considerations):


  1. Work-life balance (53.7%);
  2. Location (49.2%);
  3. Stability (33.8%);
  4. Respect (32.8%);
  5. Future Career (28%);
  6. Compensation (25.7%);
  7. Recognition (19.5%);
  8. People Management (18.9%);
  9. Development Opportunity (18.2%);
  10. Vacation (17%).


Although effective people management features separately in 8th place, how a person is line managed also has a strong impact on their work-life balance, the highest ranking factor. Managers with the skills and alertness to support their teams in finding the right balance, make the difference in whether organisational policies are lived, or exist only on paper – and a manager who doesn’t role model effective work-life balance makes it far harder for their employees to achieve one.  Equally, line managers have a strong impact on a number of the other factors in the top ten, including respect (number 4), future career (number 5), and especially recognition (number 7). While aspects like location and compensation may not be in a manager’s control, what these factors reveal is that a huge amount of what keeps employees retained and engaged comes down to their experience at their direct manager’s hands. It’s rightly a cliché to say “People leave managers, not companies”  but these findings suggest that people also stay with good managers if those managers care about providing people with development, recognition, and respect.

Taking a look at the top factors that cause dissatisfaction, we can also see the influence of a direct manager.  Not being able to identify a future career in the company is the top dissatisfaction factor, with a lack of development opportunities also featuring separately at number 5. Again, the skills and behaviours of a direct line manager will be the most significant factor in whether employees see a path ahead, or not. While HR may work hard to create development paths and support career planning, there is no substitute for coaching, support, and hands-on encouragement from the person who knows their work best.  And poor overall management is the second biggest factor that can disengage, as we see below. High performers and hard workers will quickly become disengaged if they see their manager struggling to deal with underperformance or failing to address poor behaviour.  

Top 10 dissatisfaction factors (the figure again showing the percentage of employees ranking the attribute as one of their top five dissatisfactions):


  1. Future Career Opportunity (45.8%); 
  2. People Management (39.3%);
  3. Compensation (33.8%);
  4. Recognition (32.8%);
  5. Development Opportunity (32.2%);
  6. Work-Life Balance (32.1%);
  7. Manager Quality (31.2%);
  8. Respect (23.6%);
  9. Location (19.9%);
  10. Meritocracy (16.5%).


What these findings suggest is that pay plays relatively little role in keeping people engaged once they have joined an organisation, but that getting pay too wrong can quickly slip into dissatisfaction. In other words, pay needs to be sufficient to keep people from losing engagement, but beyond this level, paying more won’t engage more – and there is more to be won by making sure managers can offer their people support with work-life balance and career progression. Whilst having a job that lacks these elements is unlikely to lead to burnout, it’s more likely to be a case of brownout for these disengaged employees—the graduated loss of energy, focus, and passion, which ultimately diminishes an employee’s success.3

What these findings also show is that making your organisation a more attractive place for talent needs to go beyond policies and initiatives by HR.  Checking in on how those policies are put into practice by line managers, and developing and supporting line managers to develop and support their teams, is necessary to take policies from intention to reality. Over time, through this support, the organisation can create a culture of development and of a healthy work-life balance that will not only help to retain its talent but build a reputation that attracts people from outside.

Compensation is always an easy factor to point to when evaluating how appealing your company is to talent. However, it’s worth considering whether an increase in the compensation budget might be better spent in offering line managers development and training around the things that are most important to their people. There are better ways than compensation, it seems, to move people from present to truly engaged.  



1Oracle (2011). Talent Strategies and the competitiveness of the US aerospace and defence Industry. Economist Intelligence Unit Limited. The Economist.

2CEB/Corporate Executive Board (2014). CEB Research, Global Workforce Insights Q2 2014.

3Kibler (2015). Treat Promises to Yourself as Seriously as Promises to Others. Harvard Business Review, September 09, 2015.

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