Generous pay helps employers too, says psychologist Adam Grant

What if companies paid their employees really, really well? Like, the absolute highest salaries they could afford?

Sounds crazy, right? Maybe not.

According to Adam Grant, a psychologist and bestselling author, it’s actually in the company’s best interest. He says high starting salaries and generous raises are a smart move.

Why? It’s About More Than Just Money

When people feel valued, they stick around. High pay gives employees a reason to stay.

What does that mean for employers?

• Better retention rates (less people quitting! )
• Lower turnover costs (no constant hiring! )
• A more stable and experienced workforce

Grant sees higher salaries as an investment. Not just an expense.

He told Fortune that paying people well boosts their motivation and makes them more likely to stay.

The Cost of Losing Good People

Replacing an employee is expensive. Really expensive.

Gallup estimates it can cost a company up to *two times* the worker’s annual salary. Ouch! That’s way more than the average raise.

Think about it: the time spent recruiting, training, and getting a new person up to speed. It all adds up.

Loyalty Matters

Grant says when companies pay top dollar, they get something special: unusual loyalty.

Employees know they can’t easily find that same salary somewhere else.

Happier Employees, Better Results

It’s not just about keeping people around. Higher salaries can also make employees more motivated and engaged.

According to Gallup, engaged employees mean:

• Less absenteeism (people actually show up! )
• More productivity (getting more done! )
• More profitability (making more money! )

The Job Market Reality

A recent survey found that many workers feel employers have the upper hand right now.

But maybe, just maybe, generous pay is the key to standing out and attracting the best talent.