Organizations striving to distinguish themselves in the fierce competition for top talent must offer rewards that resonate with applicants on both economic and emotional levels. Currently, many businesses find themselves navigating an environment where the boundaries between professional and personal spheres are increasingly blurred. In this article, I aim to explore the concept of emotional salary and its impact for fostering resilience within businesses.
Emotional salary refers to the set of intangible benefits that provide non-monetary rewards, such as motivation, enthusiasm, and social support. According to Mike Rosenberg, professor at IESE Business School, "The relationship with a company is multifaceted. There is a critical factor, which is feeling that we belong to something bigger than ourselves”. As a component of employer branding, emotional salary influences the image that companies portray as an employer of choice in their respective industry.
Besides, in a survey conducted by Achievements Workforce Institute, when asked "which job would you stay longer at?" 72% of respondents chose the option "A job where I feel supported, cared for, and valued," while only 28% responded that they would choose the option "A job where I don't feel supported, cared for, or valued, but am paid 30% more." This insight highlights the impact of psychological well-being at work, since it often outweighs financial incentives in employee retention.
Source: Achievements Workforce Institute
A good emotional salary begins with a leadership that attentively considers the priorities and perspectives of both current and potential employees, a leadership that listens, comprehends and takes action. Given its inherently subjective nature, emotional salary varies across individuals and organizations, meaning there are no formulas to ensure success. However, Achievers Workforce Institute has found five ways to improve emotional salary. These include culture alignment, frequent recognition, work relationships, consistent feedback and progression. More specifically, certain measures have demonstrated efficacy in enhancing overall employee well-being: flexible work arrangements, whether through hybrid models or remote setups; initiatives promoting work-life balance, such as on-site amenities or childcare services; avenues for continuous professional development to hone skills and stay abreast of industry trends; programs supporting physical well-being and stress management; and alignment with the company's mission and values to instill a sense of pride and commitment among employees.
As reported by McKinsey, the best suggestions for how to integrate emotional salary within the work environment come from employees themselves. Indeed, to make sure employees are benefited from the adopted measures, leaders should begin by listening to their daily experiences and needs.
I have seen firsthand how companies that prioritize emotional compensation for their employees ultimately emerge as long-term success stories. In fact, a study by the consulting firm Gallup confirms that greater employee engagement leads to a 21% increase in profitability and a 17% increase in organizational productivity. Moreover, when employees feel genuinely valued and connected to their workplace, they exhibit greater loyalty and are less likely to entertain offers from competing firms. According to psychologists Richard Ruan and Edward Deci’s self-determination theory, all employees have three psychological needs: competence, autonomy and relatedness, and meeting these needs enhances both high-quality performance and overall well-being.
Throughout my executive career, I’ve learnt that the most attractive companies for applicants are those with a reputation centered on fostering environments where employees feel valued, motivated and fulfilled. While financial remuneration undeniably remains a priority, it is the emotional reward that truly sets an organization apart in the eyes of prospective talent.
In an increasingly digital and transparent world, where company profiles are available to any prospective talent, achieving such a reputation is crucial to attract and retain the best talents.
