Salary or Benefits Which is More Popular?

When it comes to recruiting and keeping employees, employers may wonder about which is more important salary or benefits? Which is more popular, and which is more likely to inspire employee loyalty?

The truth is, when it comes to getting and retaining an employee, salary may play a bigger part, at least in the short term. When it comes to keeping an employee, however, benefits may win out.

The Lure

For example, if you as the employer are trying to lure employees from another company, or even fresh out of college, the higher the starting salary, the better.

Studies show that younger job candidates tend to be enticed by higher starting salaries.

So if you're looking to bring in fresh talent straight off the college assembly line, you may be better off starting with a hook with bigger bait than the next guy.

This type of strategy will get you everywhere with college graduates who have never envisioned themselves as able to have such earning power.

The Hook

But when it comes to keeping the top talent that you attracted, it turns out that benefits wins the long odds.

As the following article shows, health insurance considerations for job seekers over the age of 30 are prime motivators.

As employees mature and start families, benefits become more attractive.

Employees, who marry, buy houses and plan families and retirements are looking for time off, club membership sponsorships, maternity benefits and 401K matching deposits.

So after you've lured them to your company with higher salaries, you can hook them with all the benefits they need to start their lives out right, in order to gain their employee loyalty.

The Line

The line is the long haul.

Employees who feel safe and secure with their career and financial situation are more likely to stay put instead of looking for better salary and benefits elsewhere. And employees who don't migrate to other companies provide the kind of experience and expertise that money can't buy.

When you provide a fair salary and competitive benefits, you can build a workforce that is loyal, experienced, seasoned and familiar with your industry and the way you do business.

The answer to whether salary or benefits is better is neither. They are both valuable at different times in the employees' lives.

The way to answer the dilemma of whether to offer higher salaries or better benefits is to offer them both at different points in your employees' lives.

So, offer a little bit higher salary than your competitor's to lure them in, offer expanded benefits upon finishing an agreed upon time of work experience at your company, and keep the best employees by offering both a high salary and generous benefits.

It's a win-win situation that will keep your company on top.

Photo credit: Image courtesy of Stuart Miles at

About the Author: Kate Supino writes extensively about best business practices.

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