Employee retention isn’t just an HR priority—operations teams say it’s important too.

Of the 3,500 for-profit and nonprofit organizations surveyed by consulting services firm Gallagher, 51% report that retaining talent is a top operational priority, beating outgrowing revenue or sales (47%), maintaining or decreasing overall operating costs (29%), and ensuring business continuity (24%). Retaining talent was the No. 2 priority at for-profit organizations, behind revenue growth.

Among the for-profit companies surveyed, retention was also the leading HR priority (65% listed it as a top focus for 2023), followed by attracting talent (45%), developing and training talent (40%), and creating a strong culture (34%).

Over the decade that Gallagher has tracked this data, there’s been a shift in what companies prioritize. In years past, their main focus was controlling benefits costs and keeping tabs on evolving government regulations. Now they’re focused on employee retention and improving company culture, says Rebecca Starr, area president at Gallagher’s HR consulting practice.

“Operational teammates did not say this was a top priority ten years ago. It was HR’s worry,” says Starr. “And now, it’s not an HR problem. It’s a company problem. It’s an operational challenge and a cultural challenge.”

Most organizations (78%) are increasing base salaries to retain employees. They’re also assessing variable compensation or bonus programs (40%), medical benefits (39%), and well-being initiatives (38%).

While compensation is crucial for employees deciding whether to leave a job, the report stresses that other factors, such as a lack of career advancement opportunities, uncaring or uninspiring leadership, and limited workplace flexibility, are other key consideration factors. 

Similarly, a November 2022 Jobvite survey of over 1,200 HR leaders found that the top motivations for candidates seeking new jobs were getting more money (34%), the ability to work remotely (21%), career advancement opportunities (10%), and leaving a bad manager or company culture (9%).

“You need to have a good baseline of compensation and benefits offerings for [candidates] to even consider an organization,” says Starr. “But culture-driven benefits—flexible workplaces, remote work, allowing you to take some additional time off—are going to distinguish you in the market.”

And if company culture is increasingly becoming a determining retention factor, managers play an important role, Starr adds. “It’s not just an HR initiative. All managers, operational managers included, are in charge of owning the employee experience.”

Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion

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