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ADAM GRANT: PAY "EXTREMELY GENEROUS" SALARIES FOR BETTER RETENTION

TLDR ~30 SECONDS⚡️

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CreatorVersed Team
March 21, 2025

LATEST DEVELOPMENT

Renowned psychologist Adam Grant argues companies should maximize employee compensation as a strategic investment in workforce stability and motivation.

INDUSTRY TALK

"When organizations pay on the top end of the market range, they end up with unusual loyalty, because people know that they can't easily replicate the salary that they're getting elsewhere."

-Adam Grant, Psychologist and Author

BY THE NUMBERS

Research shows:

  • Replacing employees costs up to 2x their annual salary

  • 3.8% median annual raises in 2024

  • 4.6% salary increase for job stayers in Jan-Feb

  • 4.8% increase for job switchers in same period

  • Hiring rate at decade-low 3.4% in January

RETENTION ECONOMICS

Higher compensation leads to:

  • Decreased turnover costs

  • 78% less employee absenteeism

  • 18% increased productivity

  • 23% greater profitability

  • "Unusual loyalty" from workforce

JOB MARKET CONTEXT

Current employment landscape shows:

  • 75% of workers believe employers have upper hand

  • Job postings down 8.6% from last year

  • Diminishing returns from job-hopping

  • Narrowing gap between stayer/switcher raises

  • Workforce stability becoming premium asset

THE BOTTOM LINE

Despite conventional wisdom to minimize labor costs, Grant frames "extremely generous" compensation as a strategic business investment that yields substantial returns through improved retention, engagement, and overall company performance.

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