I was recently running a leadership program over in the USA, and a great question came up from several people. The organisation is in heavy industry, and the pay is solid for the work done, yet it is haemorrhaging staff in some locations for very little pay increases. We had a great discussion on the topic, and I wanted to write up some of the ideas we explored, as readers may be facing the same.

1 – Transformative supervision: Moving beyond LMX

The relationship between a worker and their immediate supervisor is the primary lens through which the employee views the entire company. Leader-Member Exchange (LMX) Theory suggests that high-quality relationships create a sense of mutual obligation.

The power of micro-syncs: Research on Perceived Organisational Support (POS) shows that when a manager takes five minutes to fix a minor irritant, the employee doesn’t just see a “fixed printer”, they see an organisation that values their contribution. This triggers the reciprocity norm: the employee feels a psychological debt to return the favour through loyalty and “organisational citizenship behaviour” (doing more than the bare minimum).

The “one-dollar” buffer: A supportive manager creates a “relational shield.” When a competitor offers $1.00 more, the employee calculates the risk of losing a boss who “has their back.” In psychological terms, the high-quality LMX relationship acts as a High Switching Cost.

2 – Schedule stability as a “life resource”

In the Job Demands-Resources (JD-R) Model, the ability to predict one’s life is a critical resource. For hourly workers, an erratic schedule is a “hindrance stressor”, it doesn’t help them grow; it only wears them down.

Predictability vs. flexibility: Research by Lu et al. (2022) indicates that schedule consistency (working the same days/times) significantly boosts productivity and mental health. When you publish a roster three weeks in advance, you are effectively giving the employee a “time gift.”

The cost of instability: If a competitor offers an extra $1.00 but has a reputation for “clopenings” (closing a shift and opening the next morning), an employee with a stable schedule at your firm will likely stay. They recognise that the extra $40 a week (pre-tax) isn’t worth the loss of sleep or childcare stability.

3 – Reducing daily friction: The “system” as the enemy

Turnover is often caused by “daily hassles,” which research shows can be more draining than major life events. If an employee has to struggle with a slow login process or broken equipment every day, they experience cognitive load that eventually leads to burnout.

Fixing the “peoples’ problems”: When you remove bureaucratic nonsense, you are increasing self-sfficacy. The employee feels they can actually do their job well.

The competition comparison: If your workplace is “frictionless,” it becomes a sanctuary. An employee will think twice about leaving for a dollar more if they suspect the new job will be a disorganized mess.

4 – Time-bound bridge incentives

Fuel cards & vouchers: We explored the idea of 6-month fuel cards or shopping vouchers. This is a sophisticated use of continuance commitment (the “cost” of leaving) and normative commitment (the “duty” to stay). The group thought that, with the current fuel prices and cost of living crises, this may be a reasonable request to senior management for their team members.

The “relief” factor: Research on economic hardship (Moledina et al., 2021) suggests that targeted, tangible support can significantly reduce stress. A fuel card isn’t just money; it’s the removal of a specific anxiety (the cost of the commute).

The “gift” framing: To avoid making it feel like a bribe, it should be framed as a “Cost of Living Support Bridge.” By making it time-bound, you manage expectations, but by making it a gift, you trigger the Social Exchange Theory. The employee thinks, “They looked after me when prices spiked; I shouldn’t leave them now for a tiny raise elsewhere.”

5 – Strengthening job embeddedness: The web of belonging

Job Embeddedness is the most powerful predictor of why people stay. It is the “web” that entangles them in the organisation through three dimensions: Links, Fit, and Sacrifice.

Links: These are the formal and informal connections to people. Research shows that having a “best friend at work” is a massive retention factor. Building team identity and “belonging rituals” creates these links.

Fit: This is how well the job meshes with their life. (e.g., “I stay because my kids’ school is around the corner and my boss lets me leave 10 minutes early for pickup.”)

Sacrifice: This is what they lose if they leave. If they leave you for $1.00 more, do they lose their mentor? Their flexible Friday? Their fuel card? The more they have to “sacrifice,” the more that $1.00 raise looks like a bad deal.

6 – Conduct “stay interviews”: Tapping into “employee voice”

Waiting for an exit interview is a “post-mortem” strategy. Organisational research highlights that proactive intervention, understanding why “stayers” stay, is key to preventing the “itch” to leave (Bass et al., 2024). This is rooted in self-determination theory, which suggests that employees are most committed when their needs for autonomy, competence, and relatedness are met.

The psychology of voice: When employees believe they have a channel to influence their environment (Organisational Justice), their affective commitment strengthens. A stay interview moves an employee from being a “passive recipient” to an “active partner.”

Sample questions for autonomy (control over work):

  • “If you could change one thing about your daily routine to make it more efficient, what would it be?”
  • “Do you feel you have the tools and freedom to do your best work, or does the ‘system’ get in your way?”

Sample questions for relatedness (connection to the team):

  • “What is the best part of working with your current team? What is the most challenging?”
  • “Do you feel your contributions are recognised by your peers and leadership in a way that matters to you?”

Sample questions for retention risk (The “one-dollar” probe):

  • “What keeps you here on the days when the job is tough?”
  • “If a headhunter called you tomorrow offering a slight pay increase, what is the one thing this company provides that would make you say ‘No thanks’?”
  • “What is one thing you’re learning here that you feel you wouldn’t learn elsewhere?”

We also explored the work of Hertzberg:

Sample questions for hygiene (removing dissatisfaction): Hygiene factors don’t necessarily make people love their job, but their absence makes people hate it. These questions identify the “friction” that makes an extra dollar elsewhere so attractive.

  • “Is there a specific policy or ‘red tape’ process that makes your job harder than it needs to be?” (Targets: Bureaucratic friction).
  • “If you could replace one piece of equipment or software you use daily, which would it be?” (Targets: Resource adequacy).
  • “Do you feel our current communication methods (meetings, emails, apps) keep you informed, or do they feel like a distraction?” (Targets: Information flow).
  • “Is there anything about our physical workspace or safety protocols that causes you stress during the day?” (Targets: Physical environment).

Sample questions for growth (building mastery): According to self-determination theory, the need for mastery/competence is a massive retention hook. If people feel they are becoming “better” at your company, they view the $1.00 difference as a small price to pay for “career capital.”

  • “What is a skill you have that you feel is currently underutilised in your role?” (Targets: Skill-Will alignment).
  • “In six months, what would you like to be able to do that you can’t do today?” (Targets: Future-focus and Mastery).
  • “Are there any projects or areas of the business you’re curious about that you’d like to ‘shadow’ or learn more about?” (Targets: Cross-training and interest).
  • “Do you feel you receive enough feedback to know exactly how to reach the next level here?” (Targets: Feedback loops and perceived growth).

The trust gap: Acting on even one small suggestion validates the employee’s status. This creates a social exchange where the employee feels respected, making a move to a new company for a dollar more feels like a step backwards in personal value.

Final summary: The hierarchy of retention

If you want to stop the “one-dollar” defections, you must move from transactional leadership (trading hours for dollars) to transformational leadership (building a community).

  • Start with managers: They are the “peoples’ officers.”
  • Stabilise their lives: Give them their time back through rosters.
  • Bridge the gap: Use fuel cards/vouchers as a “we care” signal during tough times.
  • Listen constantly: Use stay interviews to find the “hidden” reasons for leaving.

Further reading

  • Equitable Leadership: Retention is rooted in Organisational Justice. This resource explores how fairness and equity create the “psychological contract” that makes an employee feel valued beyond their hourly rate.
  • Listening: The Stay Interview is only as effective as the manager’s ability to hear what isn’t being said. Master the art of active listening to identify “pebbles in the shoe” before they lead to a resignation.
  • Motivating Others: Moving from transactional to Transformational Leadership requires an understanding of what truly drives human effort. Learn how to tap into intrinsic motivators like autonomy and mastery.
  • Well-being and Human Sustainability: High-friction environments lead to burnout. This guide provides strategies for building a sustainable workplace where employees have the mental and physical “resources” to stay for the long term.

The Bottom Line: People don’t leave for a dollar.

They leave because they don’t feel valued, and the dollar is the only way they know how to measure their worth.

Give them other ways to feel valued, and they may stay.

 

Do you have any tips or advice on retaining talent?

What has worked for you?

Do you have any recommended resources to explore?

Thanks for reading!

References

Bakker, A.B. and Demerouti, E. (2017) ‘Job Demands-Resources Theory: taking stock and looking forward’, Journal of Occupational Health Psychology, 22(3), pp. 273–285.

Bass, E., Salyers, M.P., Hall, A., Garabrant, J., Morse, G., Kyere, E., Dell, N., Greenfield, J. and Fukui, S. (2024) ‘Why do stayers stay? Perceptions of White and Black long-term employees in a community mental health center’, Administration and Policy in Mental Health and Mental Health Services Research, 51(3), pp. 385–397.

Deci, E.L. and Ryan, R.M. (2000) ‘The “what” and “why” of goal pursuits: human needs and the self-determination of behavior’, Psychological Inquiry, 11(4), pp. 227–268.

Giosan, C. (2003) Predictors of job embeddedness. Ph.D. Thesis. New School University.

Graen, G.B. and Uhl-Bien, M. (1995) ‘Relationship-based approach to leadership: development of Leader-Member Exchange (LMX) theory of leadership over 25 years: applying a multi-level multi-domain perspective’, The Leadership Quarterly, 6(2), pp. 219–247.

Herzberg, F. (1966) Work and the nature of man. Cleveland: World Publishing Co.

Kahn, W.A. (1990) ‘Psychological conditions of personal engagement and disengagement at work’, Academy of Management Journal, 33(4), pp. 692–724.

Lu, G., Du, R.Y. and Peng, X. (2022) ‘The impact of schedule consistency on shift worker productivity: an empirical investigation’, Manufacturing & Service Operations Management, 24(5), pp. 2780–2796.

Meyer, J.P. and Allen, N.J. (1991) ‘A three-component conceptualization of organizational commitment’, Human Resource Management Review, 1(1), pp. 61–89.

Moledina, A., Magwood, O., Agbata, E., Hung, J., Saad, A., Thavorn, K., Salvalaggio, G., Bloch, G., Ponka, D., Aubry, T., Kendall, C. and Pottie, K. (2021) ‘A comprehensive review of prioritised interventions to improve the health and wellbeing of persons with lived experience of homelessness’, Campbell Systematic Reviews, 17(2), e1154.

Rhoades, L. and Eisenberger, R. (2002) ‘Perceived organizational support: a review of the literature’, Journal of Applied Psychology, 87(4), pp. 698–714.