Dear SaaStr: Does Paying Higher Salaries Increase Employee Retention?
SaaStr
JUNE 13, 2023
Dear SaaStr: Does paying higher salaries increase employee retention? Yes, if their salaries are unfair, unequal, or below market. Otherwise — maybe not. Here’s what I’ve learned across 3 startups of my own, and investing in 25+ more: Underpaying certainly leads to departures. Employees that are underpaid get bitter and leave. Don’t let it go. Review salaries quarterly, not just annually.
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