For many, salary matters. It helps people meet their commitments, supports lifestyle choices, and can be one of the clearest signals an organisation sends about how it values work. Competitive pay can play an important role in attracting and retaining talent - but it is rarely the only factor that influences whether someone stays, leaves, or returns.
When organisations talk about retention, remuneration often becomes the headline topic because it is tangible, easy to benchmark, and relatively straightforward to adjust. However, day-to-day experience also carries real weight. For many employees, the quality of leadership, team dynamics, workload sustainability and sense of purpose can influence their decision to stay just as much as the salary figure on their contract.
It’s common to see employees move roles for an increase in pay, but it’s also common to hear employees reflect that higher pay doesn’t automatically translate into a better work experience. If an employee’s new role lacks clarity, connection, trust or growth opportunities, the move may not feel like a “win” for long.
The same applies in reverse. When employees consider returning to a previous employer, the draw is often linked to what they valued about the work environment - such as supportive relationships, strong leadership, meaningful work, flexibility, or a sense of belonging - rather than remuneration alone. Of course, pay still matters, but it is usually part of a broader decision-making mix.
A practical way to think about this is that remuneration and culture play different (but connected) roles.
Salary and benefits are often experienced as a foundation: they help ensure employees feel their contribution is recognised in line with expectations and internal equity. Culture, on the other hand, shapes the everyday experience of work - how people are treated, how decisions are made, how teams operate, and whether effort is noticed and supported.
When pay is perceived as uncompetitive or unfair, it can become a reason people start looking elsewhere. But when culture is inconsistent - for example, where there is poor leadership behaviour, unresolved conflict, limited development, or weak communication - it can also become a decisive factor in whether employees stay or go.
Rather than treating this as an “either/or”, leaders are often most effective when they view retention through a wider lens: are we offering fair, competitive remuneration and creating an environment where people can do their best work sustainably?
If you want to keep great people - and reduce the risk of regrettable turnover - here are five practical strategies leaders can apply. Each one is achievable without needing a wholesale redesign of your remuneration model.
Ask yourself: What would a new team member learn about “how things work” here in their first month?
Use simple tools such as pulse surveys, team check-ins and stay interviews to understand what is energising people and what is draining them. Look for patterns and themes rather than focusing on one off comments.
For example:
Psychological safety isn’t about avoiding accountability - it’s about creating an environment where people can raise issues early, ask questions and contribute ideas without fear of embarrassment or retaliation.
Practical actions include:
A common workplace insight is that when leaders stay silent on unhelpful behaviour, employees often interpret that silence as acceptance.
Career development doesn’t have to mean promotion. People often stay longer when they can see growth in capability, responsibility or influence.
Examples include:
Leaders don’t need to have all the answers - but they do need to communicate clearly.
Good practice includes:
Uncertainty can erode confidence quickly. Clear, consistent communication helps teams maintain focus and trust - even when circumstances are changing.
Retention is influenced by how sustainable work feels. When people are overloaded for extended periods, even strong culture elements can be strained.
Leaders can take practical steps such as:
These actions don’t remove pressure entirely, but they can reduce friction and help employees feel supported rather than depleted.
Remuneration and culture both matter. Competitive pay can help attract and retain talent, but the everyday experience of work often influences whether people feel committed, supported and motivated over time.
A useful question for leaders is not simply “Are we paying enough?”, but also:
In a labour market where skills are mobile and choices are real, a strong culture - supported by fair and competitive reward practices - can be a meaningful advantage. The organisations that invest in both are often best placed to attract talent, keep talent, and bring talent back when the timing is right.
Explore our Remuneration and Reward resources for strategies that support the organisation's goals. For assistance with your workplace matters, Members of Australian Industry Group can contact us or call our Workplace Advice Line on 1300 55 66 77 for further information.
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Georgina is the Senior HR Content Editor – Publications at the Ai Group. With over 25 years of experience in human resources and leadership, she has demonstrated her expertise across a diverse range of industries, including financial services, tourism, travel, government, agriculture and HR advisory. She is also an accomplished writer and editor, known for creating high-quality, engaging content that educates and informs. Her writing includes a variety of formats, such as blogs, articles, policies, templates and guides.
