Employees don’t just quit bad bosses — they also quit bad companies.

That’s one of the big takeaways from Payscale Inc.’s first Retention Report, which analyzed crowdsourced data from thousands of workers across five years. It showed workers are more likely to leave jobs at companies with poor future prospects and for better or fairer pay.

The data suggests many companies need to step up their game to retain employees over the long term — especially as the labor market is expected to remain tight in the coming years due to demographic shifts and other factors.

To be clear, relationships with a manager are still very important. They just aren’t quite as important to turnover as other factors.

Lexi Clarke, chief people officer at Payscale, said even though employees are less likely to leave their jobs now than they were during the height of the Great Resignation, employees are still making demands that employers should be aware of.

Clarke said the report shows employees are most likely to put in notice when a company’s long-term viability is questionable or if they believe their pay is unfair.

“Publishing pay ranges to job ads alone does not communicate fairness and may not be enough to drive retention,” Clarke said.

Overall, workers who strongly agreed their company had a bright future were far less likely to seek out a new job. Fair pay wasn’t far behind.

However, while pay transparency overall reduced jobseeking, it actually increased it slightly among Gen Z workers, likely due to younger workers seeing the range of salaries in their industry and motivating them to maximize their salaries.

Ruth Thomas, pay equity strategist at Payscale, said companies need compensation strategies that make sense for the business, include internal and external pay equity analyses and meaningful communication.

“The objective should be for every employee to know their pay is fair and why it’s fair,” Thomas said. “Employers must go a step beyond posting salary ranges to really show they value their employees, while also proving that the company has a positive work culture and a bright future.” 

The report also found feelings of fair pay mattered most in white-collar industries, where workers were far less likely to search for a new job than in blue-collar jobs or the health-care industry. The report stressed this was likely due to the lack of salary information in white-collar jobs.

Job aggregator Jooble released a survey that also found that workers were far more likely to ask for a raise when they saw overall salaries going up in their own industry.

But about 49% were unhappy with their current salary level, and about 62% said they plan to ask their employer about a salary increase in the next quarter.

About 70% of the workers surveyed said they were ready to quit if their wages were not increased, and while most workers wanted an increase in salary of 10% or more, about 81% would also be satisfied with something else such as a paid vacation.

Overall, the push for pay transparency, especially in job postings, has led to more salary information online than ever. Data from Indeed’s HiringLab found about 45% of job postings in the United States included some salary information in April, more than double the 20% prior to the pandemic.

California, Colorado, Connecticut, Maryland, Nevada and Rhode Island all have pay transparency laws for nearly all employees on the books. New York’s law will go into effect later this year. Washington state requires all employers with 15 or more employees to disclose wages or salary ranges for potential jobs. Cities across the country, including New York City, have passed similar laws.

But new laws aren’t the only factor driving increased salary details in job listings. About 71% of workers surveyed said they would be less likely to apply for a job if the listing did not include a salary range, according to a recent survey by Skynova.

Pay transparency is not the only challenge business owners are facing. Legislation has ushered in new worker protections that go into effect soon, while the National Labor Relations Board has cracked down on key aspects of severance agreements.

Written by Andy Medici