For many years, salary was treated as the main tool for retaining employees. If people were paid well, the assumption was that they would stay. But employee expectations have shifted. Today, people are looking beyond the pay packet and asking bigger questions about their future, wellbeing, leadership support and sense of purpose at work.
This change is creating an important challenge for employers. Pay still matters, especially during periods of cost-of-living pressure, but it is no longer enough on its own to keep people engaged. Employees are weighing up career opportunities, work-life balance, job security, management support, company culture, team connection and development opportunities when deciding whether to stay.
For businesses, this means retention can no longer be viewed as a salary conversation alone. A competitive offer may help attract talent, but long-term loyalty depends on the broader employee experience.
“Employees stay where they feel trusted. They leave when they feel invisible.”
On a recent AU Market Update, Host Catherine Kennedy, NSW Managing Director, was joined by Guest Nettie Herselman, HR Manager at CPSN, to discuss why salary and bonuses are no longer the strongest retention lever. In people2people’s 2026 Employment Market Report, only 57% of employees rated salary and bonuses as a key factor in staying with an employer, compared with 73% who prioritised career opportunities and 72% who valued work-life balance.
For Nettie, this shows that employees are looking for sustainability, not just short-term reward. Salary is still important because people need financial security, but once that baseline is met, employees begin asking deeper questions. Can I build a future here? What comes next? Am I part of the bigger picture?
This is particularly relevant in care-based and community-focused sectors. Nettie explained that many candidates are no longer looking for roles that feel temporary or transactional. Instead, they want to invest their time and energy into building meaningful, long-term careers. For employers, that means career conversations need to start early and continue regularly.
Work-life balance is also playing a much bigger role in retention. It is no longer seen as an added perk. Employees are becoming more protective of their boundaries, wellbeing and ability to disconnect after hours. As Nettie explained, many people are asking whether they can do good work without sacrificing their health, family, time or identity.
This does not always mean fewer hours. In practice, work-life balance can mean predictable rosters, clear expectations, autonomy, flexibility and trust. It also means leaders need to understand what wellbeing looks like in their own organisation, rather than relying on a one-size-fits-all approach.
Career opportunities are another key part of the retention picture, but they do not always mean promotion. Not every employee wants a new title or a move into management. Some may want to deepen their skills, take on project work, mentor others or build confidence in their current role. In flatter organisations, progression needs to be designed more creatively through capability pathways, skills matrices, peer mentoring and succession planning.
Learning and development also sends an important message to employees. When an organisation invests in someone’s growth, it shows that they are valued and seen as part of the future. But development needs to be meaningful. Training that exists only to tick a compliance box can quickly feel disconnected from daily work.
For learning to support retention, it needs to be practical, relevant and connected to the employee’s role. Coaching, one-on-one supervision and tailored learning pathways can help employees feel more capable and supported, while also strengthening the organisation’s overall capability.
The risk for employers is relying too heavily on pay while neglecting the other factors that influence why people stay. A higher salary may delay turnover, but it will not fix poor leadership, unclear expectations, limited growth or a lack of trust. The strongest retention strategies are holistic. They combine fair pay with transparency, development, wellbeing, communication and consistent leadership.
How can employers build retention beyond salary?
- Create clear career pathways, even when promotion is not immediately available.
- Ask employees what progression means to them, rather than assuming everyone wants the same thing.
- Support work-life balance through clear expectations, flexibility and trust.
- Invest in learning that is practical, relevant and connected to daily work.
- Train leaders to communicate clearly, recognise effort and build psychological safety.
- Treat salary as one part of the employee experience, not the whole retention strategy.
