“One of the defining facets of the modern economy is that we’ve run out of people, and this is likely to stay the same for a long time,” Josh Bersin says “Every aspiration your CEO has will be constrained by people issues and the challenges of growing the company when there aren’t enough people.”
As a result, being able to attract, retain, and make productive, the talent you need is likely to be one of the foremost challenges businesses face in the years ahead. In the last decade, there has been a growing appreciation for the value of purpose, with many reports suggesting that giving people meaningful work is the main route to attracting the talent you need. Is that really the case though?
When people have to choose between doing work that matters to them or getting a bigger paycheck, it’s not a tough decision. Most folks overwhelmingly go for jobs that pay more, even if those jobs don’t bring much personal satisfaction. This is what recent research from the University of Illinois Urbana-Champaign found.
Although having a job that means something to you is important, it seems that money talks louder when people consider their career options and their current jobs. This should come as no surprise, as the world has been beset by record numbers of strike days, as people act with their feet and demand higher pay in response to the cost of living crisis.
Money talks
“Jobseekers often must choose between prioritizing meaningful work or high compensation, and this paper illustrates that people have a stronger relative preference for a higher salary as opposed to meaningful work,” the researchers explain. “Ideally, you’d want to have a highly compensated, highly meaningful job, right? But sometimes you have to choose between the two, and the vast majority of people would pick higher pay.”
In a series of eight studies involving over 4,000 participants, researchers delved into the decisions people make when they weigh the significance of their work against the size of their paycheck in real and imagined job scenarios.
While both meaningful work and a hefty salary were considered significant qualities on their own, when individuals were asked to choose between the two, they consistently leaned towards jobs that paid well but didn’t offer much personal meaning, as observed in six of the studies. Furthermore, two studies revealed that participants also had a stronger inclination toward higher pay rather than more meaningful work in their current employment situations.
“Whether it’s college students, people just starting out in their careers or much more experienced workers—the common thread is that people frequently just focus on how much more money they can make, even though having a meaningful job is important to sustaining long-term motivation at work,” the authors explain.
Against the grain
The findings are interesting because in the post-Covid era, there has been a general belief that people are less interested in money and more concerned about their work providing them with meaning.
Yet, with analyses of studies conducted both before the pandemic and afterward, the researchers are confident in their finding that money was generally viewed as more important than meaningful work.
They believe that this may be in part because while meaning is desired, it’s generally not something that’s experienced very often, so people have more realistic expectations.
Buying happiness
As a result, people fall into the trap of thinking that a bit extra in their paycheck will ultimately translate into a happier and more meaningful life, which isn’t always the case.
“Quite obviously, that’s an assumption that carries some risk,” the researchers explain. “The broader implications might be that if people had things like guaranteed health care or a better social safety net, then they might not have to prioritize just taking the highest paying job at the expense of a lower-paid, more meaningful job. They might be able to find a career that’s more deeply fulfilling to them, such as teaching or social work, without being concerned about whether they can afford next month’s rent.”
Interestingly, however, the research showed a similar phenomenon even among workers earning more, with higher paid staff still tending to plump for more money over more meaning. Those people are less likely to be craving some of the more fundamental aspects of human existence, yet they still strive for more.
Raising pay
In The Case for Good Jobs, MIT Sloan’s Zeynep Ton argues that findings such as this should act as a wake-up call for employers, and there is a strong need to provide good jobs that pay well in order to attract the talent they so crave.
“While many leaders want to provide good jobs – that pay more, provide dignity and meaning in people’s work, and offer opportunities for growth – most don’t know how to start, or they don’t think it can be done without hurting the bottom line,” she explains.
Too often, Ton argues, employees are viewed as a cost and therefore something to be exploited to extract maximum value from. This results in high attrition rates, which further exacerbates the problems for those who remain, and the vicious cycle continues.
It’s far better to pay a good wage that ensures people remain and feel valued. This investment more than pays for itself through higher retention and productivity rates, while also, as the research suggests, helping to attract talent in the first place. Maybe it’s time managers dipped their hands into their pockets?
