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The main reason workers leave a company is to take on a bigger challenge – rather than to earn a higher salary – according to a survey.

shutterstock_178252223The research reveals that pay is one of the least likely incentives for staff moving on and factors such as a better work-life balance and a better working environment are more important.

The results underline how employers need to look at other drivers – rather than just pay – if they want to reduce staff turnover.

The survey, from HR software and employment law advice company BrightHR, asked 2,000 SME owners, CEOs and MDs from across the UK to choose the three main reasons employees leave companies.

The top reason cited by 41% of business leaders is to take on a more challenging role.

The lure of an easier role (39%), a better work-life balance (38%) or a better work environment or culture (34%) are seen as more significant factors than higher pay (21%).

A company with better leadership (21%) and more recognition and rewards (6%) are additional incentives.

Business leaders believe the biggest financial costs caused by staff turnover is a loss of clients (45%), cost of lost output (41%), retraining fees (7%) and recruitment fees (6%).

The biggest non-monetary effects are time in training, continuity in knowledge and work practice, client confidence/impact on brand and staff morale.

The results underline how – as the lines between work and home life have become blurred – employees want more flexibility in their work lives.

As a result, employers need to put less focus on cash incentives such as bonuses and offer policies such as flexible working as perks, allowing workers to achieve a better work-life balance.

Moreover, BrightHR believes that employers should recognise the value of employee engagement and adopt a culture that embraces fun in the workplace.

Building a culture of trust that embraces workplace fun improves innovation, boosts morale, reduces absenteeism and staff churn whilst increasing productivity and profitability.

Paul Tooth, co-founder and CEO of BrightHR, said: “We’ve argued that employers should pay workers the market rate – or slightly more – in order to keep them engaged and stop them looking for another role.

“Clearly, however, employees leave companies for many different reasons.

“What this research reveals is that employers do not regard higher salaries as one of the main factors for staff moving on.

“Factors such as a desire to take on a more challenging role, a better work-life balance and a better working environment are more important.

“Therefore, companies who want to retain staff and reduce turnover costs should look at ways to achieve a happier, more inspired and more committed workforce.”

The survey from was conducted as part of BrightHR’s ‘Play and Productivity’ report, compiled together with author and productivity expert, Graham Allcott. Download the full report for free at https://pages.brighthr.com/playandproductivity.html