Latest / Your Dream Coach Podcast / How to Retain Employees When Raises Are Small in 2027
Transcript
- Your Dream Coach Podcast: Over the next few weeks, a lot of your best people are gonna find out what their raise looks like for 2027. And for most teams, it's gonna be small. And so if you've been wondering how to retain employees when you can't give the big raise, this episode's for you. Because money matters, but it is rarely the whole reason that someone stays. So, welcome to today's episode of your dream coach podcast. I'm your host, Shayla Wei. And today we're talking about how to retain employees, especially your top performers. In a year when the budget is tight and good people still have options. And this one connects directly to my book, Dream Bigger, Lead Better, which launches December 1st. And in the last part of the book, Dreams in Action, there's a chapter on teaching your team to dream. It's the heart of what I'm sharing today. And if this episode helps you, the book will go even deeper. So you can join in the launch list. The link is in the show notes, and details will be posted very soon. Now, this is your Dream Coach where podcast where we focus on leadership fulfillment and growth. And we look at them as one big goal, not as three separate ones. Because I really focus on helping entrepreneurs, business owners, and leaders dream bigger, lead better, and build the vision, sales, and systems together, growing the business and the person that's running it. So today we're gonna look at the newest data and what it really says about why people really leave. A little of my own story. And my stay plan. So five things that matter more to your best people than the size of their raise. So let's start with the numbers because they matter. And salaries.com's latest salary budget report released at the start of October found that US employees are projecting 3.5% salary increase budgets for 2027. And that's the same as this year. Now, the median merit budget is 3%. They also did the math on what that means for a top performer. On a $75,000 salary, the difference between a 3% raise and a 5.5% top performer raise works out to be about $72 a paycheck. Their words, not mine, is that gap is hardly sufficient to drive motivation. Or defend against external poaching. And at the same time, people feel it. A resume now survey reported by SHRM found that 69% of workers feel underpaid. Now add one more piece. In NFIB's September survey, small business owners named the availability of quality workers as their top problem. So here's the squeeze that a lot of you are in. Your budget is tight, your people feel underpaid, and replacing a great person is harder than ever. And if the only tool you have is the raise, you're gonna lose. So here's the good news: that pay is rarely the main reason that people walk out the door. Work Institute tracks why people actually leave their jobs. And in their report for the second quarter of 2026, The number one reason was career at 19.6% of separations. Base pay was 6.9%, and management was 10%. So read that again. Career and management together account for more departures than pay by a lot. And Gallup found that in the first half of 2026, Only 49% of US employees strongly agreed that they know what's expected at them of them at their workplace. So half your team may not even be sure what winning even looks like. And so what I found is that people quietly start looking for three reasons. They can't see their next step. They don't know what winning, even if they if they are winning and what that looks like, and they don't feel seen beyond their output. None of those are fixed with a 3% raise. And all of them are fixed with leadership. Pay gets people in the door and growth keeps them in the room. So I want to be clear about one thing. This isn't permission under pay people. If someone is truly below market, fix it if you can. Fair pay is the floor, it's not the ceiling of what keeps people. Now I spent nearly 20 years leading in direct sales, building teams all across Canada and developing over a hundred managers. And I can tell you the people who stayed the longest were rarely the ones who were paid the most. And in 2006, so 2007, I went on an incentive trip with the direct sales company I was I was working with. And part of that trip, we did an exercise that was inspired by Matthew Kelly's book, The Dream Manager. And we wrote down a list of 100 dreams. Now that trip wasn't a raise, but it showed me a company that cared about where I was going and not just what I produced. And so that's what I want you to take from today. People don't just stay for a paycheck. They stay for a future that they can see. So I want to talk about the stay plan: five things that matter more than a raise. And so here's what I do before your year-end conversations. And I call this the stay plan: is step one. Is have the stay conversation before the raise conversation. Don't wait for an exit interview to learn why people leave. Sit down with your key people now and ask what would make you want to be here three years from now? And what would make you start looking? And then listen. And you're gonna learn more in 20 minutes than in any engagement survey. And what I found in my years of leadership is that the best leaders out. The questions that they sometimes don't want to hear the answers to. And so being upfront before that conversation and asking them what would make you want to start looking? You can find those pain points and solve ideally before you ever get to that situation. Step two is to draw the next step. So career is the number one reason people leave. So make the path visible. What's the next role, the next responsibility, the next skill? And what does ready look like? And put that in writing. A path that someone can see is worth way more than a promise that they will have to guess at. Number three is make winning visible. If half of employees aren't sure what's expected of them, start there. Give each person three clear measures of success for 2027. And then check in on them every month. People stay where they know that they're actually winning. Number four is connect their dream to your vision. Asking each person, what's one dream that you want to make real in 2027? Maybe it's their putting a down payment on their first home, maybe it's a trip, paying off debt, maybe it's a promotion. Maybe it's just a little bit more flexibility so they can take their kids to school. Then show them how growing with the business actually helps them get there. And when people see their dreams inside your vision, They stop working for you and they start building with you. I'm gonna say that again. They stop working for you and they start building with you. And then energetically in a culture of a team is a game changer. And then step five is to be honest about the money. Don't hide behind the number. Explain what the raise is, why it is what it is, and what would it take to earn more. Whether that's a bonus tied to growth, a profit share, or a review date that's maybe six months out. Only promise what you can keep. Honesty about a small raise builds more trust than silence about a big one that never happens. Now, here's the shift I want you to make is retention isn't an HR metric. It's a leadership metric. So if you have managers, they're the ones having these conversations. Management drives 10% of departure in that work institute data. So your managers need the stay plan to walk them through it. Role play the state conversation with them. Ask them each month who on their team is at risk and what they're doing about it. And then watch your own energy. In a tight year, it's easy to go quiet and defensive. Your team reads that it's scarcity, and scarcity makes good people nervous. So instead, share the company's dream for 2027 and show each person where they fit in. And your best people don't need you to have unlimited money. They need you to believe they're growing, they're winning. And that their dreams matter here too. So your challenge this week is to pick your top three people and have a conversation with each of them before the end of the year. Ask what would keep them, ask them what would make them leave, and then write down what you hear. Now, if you want to go deeper on teaching your team to dream, that's a whole chapter in my book, Dream Bigger, Lead Better, launching December 1st. And if this episode helped you, I'd love your support. On Apple Podcasts, you can leave a rating and review. And then on Spotify, just hit follow and give it a rating. And then on YouTube, you can tell me in the comments who kept you what kept you at a job longer than the paycheck would have. Thank you so much for tuning in today. I really appreciate your support. I'm very excited to finish 2026 really strong and bring some really positive momentum into 2027. Until next time, continue to dream bigger, lead better. Thanks for tuning in.