How a Viral Post Reveals the Real Cost of Letting Your Talent Walk

CEO and founder of talent sourcing platform Outsourcing Remotely, Francis Perdo evoked a common workplace scenario on his LinkedIn page recently.

The hypothetical — where a hard-working employee requests a raise but is told to wait six months, only to have their boss later deny it on account of budget limitations — resonated deeply with the LinkedIn community. Within a few days, his post garnered over half a million likes, along with thousands of comments and shares. 

For anyone working in talent acquisition, the scene reads like a cautionary tale writ large: Employee eventually quits and the job sits vacant for months, which costs the organization a bundle of money and piles on added stress for the rest of the team. 

The moral: It pays to pay.

Especially now, some argue. In a job market beset by layoffs and hiring freezes, employee retention has never been more crucial. The truth is that turnover comes with a hefty price tag that many companies just can’t afford right now. One wonders, then, why scenarios like this are all too frequent?

“It’s passive firing,” comments Chris Goodin, an author living in Florida. He believes organizations defer raises when they can’t find a reason to terminate an employee. Instead, they “get another year of production out of them” before the employee quits, he says. “And right when the team starts to feel the labor strain,” the company posts the position at the lowest rate they know someone will do the job.

Which would be a rather cynical approach, not to mention a short-sighted way to run a business. Norman G, a resume writer who helps teachers transition to careers in tech, notes that promotions are cost-effective. “Promoting from within allows companies to capitalize on existing knowledge of their employees,” he comments, “which can lead to increased productivity and improved overall performance.” 

Ericka Navarro, a VP at Rethink Loyalty, agrees: “This is one of the top three things I tell all business owners/CEOs.” She says the cost of replacement and loss of knowledge combined with the dip in employee engagement far exceeds the amount of the raise. Her advice: Invest that money in your employee and it “will drive back twice the value.”

Indeed, there’s plenty of research showing the benefits of internal mobility, yet many organizations still adopt the wait-and-see approach depicted in Francis’s hypothetical.  

Attorney Alexandra Balmer sees this as a shift in workplace culture, and the main reason job-hopping is more prevalent today. In a comment, she talks about the erosion of employee loyalty and how older generations view jumping from role to role as a sign of fickleness or incompetence.

“But my perspective [is] there’s little value for most [workers] in remaining with an organization long term,” she says. Pensions have all but disappeared and promotions and raises are hard fought and meager, she argues. “What do employees get in exchange for loyalty?” Alexandra asks. “It used to be a heck of a lot more.”

Some commenters seem flummoxed by the whole dynamic. Diania Merriam, host of a popular personal finance podcast, says that expressing displeasure with your salary can get you flagged as a flight risk, just as staying put after you’re denied a raise can make you look unambitious. 

“Many of us feel like we’re walking on eggshells when negotiating our pay,” she comments. “But remember, your employer is your customer, not your overlord. . . . The most straightforward solution if you’re not happy with your pay is to go find another customer.”