Aaron Fulkerson
It’s an employee market. We hear this every day.
The great recession, advancements in tech, the rise of the gig economy and baby boomers retiring at record levels have exacerbated the struggle for talent.
We’re seeing employees jump ship for more money, and it’s happening across industry sectors. Right now, more than ever, the easiest (and most tempting) way for someone to increase their income sharply is to take another job.
I’ve seen countless professionals make financially driven moves to a different employer, and I’ve seen the results of those decisions. And I’ve learned a very important lesson:
Good money in the right environment is better than great money in the wrong environment.
It’s true – the grass is not always greener. And there’s data to back this up.
Studies have shown an important lesson about money and happiness. Making more money does in fact lead to more happiness – to a point. Having to worry about basic living expenses, debt and a lack of savings for the future does negatively affect a person’s happiness. Understandably so.
A recent study for Oklahoma cited for $60,000 to $75,000 as the range needed for emotional well-being and $95,000 as the threshold for total life satisfaction. At $75,000, basic living expenses can be easily met, debt can be managed, and someone can squirrel away some savings. Maybe even get some vacations in.
But here’s where it gets interesting.
Results vary dramatically after that threshold. There is not a strong correlation that further income above the threshold results in increased happiness. For some people, it’s quite the opposite. More money, more problems.
I always caution individuals who have dollar signs in their eyes, but also from the company perspective. I have a hard time trusting an employer who is dramatically overpaying for a job. That is a short-term fix to a long-term problem, which does not feel like good leadership. Environments that bloat their overhead to retain talent are setting themselves up for problems. The economics of a business has to work, no matter the environment.
We all must adjust our expectations in the current climate because inflation has set in everywhere. We will be lost if we don’t acknowledge and respond to that.
But let’s not overdo it. This is not a forever dynamic, and we have to take care of our future as much as our present.
Aaron Fulkerson is a partner at the consulting firm Schnake Turnbo Frank.
