RIP: The Paycheque’s Fall From Grace

image of a blank paycheque with a red circle and line through itA paycheque…

We all need one. We expect one. And, if it’s the one thing that every single one of us indisputably agrees we want and need, how can it possibly be as out of style as fedoras, VHS tapes, and Blockbuster video stores?

Because on its own, it’s so behind the times.

A paycheque on its own is likely how you felt when you went to your first college party and didn’t know anyone. Getting only a paycheque – devoid of appreciation, friendships, and a sense of being part of something bigger than yourself – isn’t enough to keep people coming back.

So now you may be thinking, okay sure, but are you telling us to stop giving paycheques?

Nope.

The point is, it’s table stakes.

Let’s get realistic about why the paycheque isn’t enough to attract the best. Sure, if compensation is not competitive, we can’t enter the game. So, it’s relevant because we’re working with the assumption that your paycheque is attractive enough to bring people to the table. And sure, if people see their bonus cheque as part of their overall compensation and we yank it, people will not be cool with that (we call that breaking the psychological contract.) So, all things being equal – you pay fairly, you compensate how you promised you would, and the paycheque rolls out at their regular intervals; I’m here to tell you, across industries, a paycheque is no longer enough to attract and retain great people.

The cost to enter the “retain great people” game has been raised. And that means the other “players” at the table aren’t just your direct competition. People need, actually scratch that, they’re expecting more than money.

The paycheque has to share the spotlight with benefits, recognition (not just rewards/perks), work/life balance (the real kind, not just the “we should do that” kind), and meaningful work. Let’s get micro about the death of the power and potency of the paycheque.

The Death of the Paycheque

Why a paycheque alone isn’t cutting it:

  1. Everyone gets a paycheque. What differentiates your company from anyone else? Every (ethical) company on the planet gives a paycheque. If your compensation strategy is the equivalent of a multi-pack Haynes white V-neck, I wouldn’t expect people to be cheering in blissful gratitude. They earned it; they got paid for it. Boring. You gotta be different.

  2. Employees can control their own paycheque. The gig economy means that people can augment their income by doing something they love and fits their lifestyle. Like driving? Drive an Uber. Rockstar crocheter? Open an Etsy store. Social media goddess? Run a few people’s IG accounts. Some companies are embracing this, such as giving staff opportunities to become their own boss on the side. They know it’s either that or people leave entirely.

  3. Paycheques can’t keep up with workplace trends. You’ll be challenged to iterate your compensation structure fast enough to ensure that you are paying the most competitive rate to recruit the most highly specialized roles. The compensation strategies we HR folks learned how to build in our HR training are not nimble enough to be adaptive, and even if we wanted to break out of the mould, there may be others who profess to need “fairness across the board.” We have internal struggles that stifle comp adaptability. The trend, by its very definition, is out in front, and your comp strategy (and paycheque that follows) is like a hiker climbing a mountain with a month’s worth of supplies on its back.

  4. Paycheques are only for the employed. Yes, you heard that right. Think of the prospective employee who hasn’t gotten that paycheque in their hot little hands yet. How motivated are they to rock your world? The experience people have of you before they even know how much you will pay them will make a greater impact on if they choose you rather than how much they’ll make this time next year. In fact, some professionals are willing to get paid less for the type of work experience they desire. 

  5. Paycheques have massive constraints. Let’s say to deal with a talent crisis; you were willing to temporarily or permanently pay more. Would your board of directors, collective agreements, and other constraints allow you to do so? Now, some companies may be nimble enough to do this; however, there’s always a ceiling. There is no ceiling to goodwill, a sense of community, appreciation, and a shared sense of mission. Double down on that, and that’s the level you can compete at and win the talent battle.

  6. Paycheques are married to compensation bands. In many corporations, to make some semblance and fairness to pay, there are often pay bands, grids, red circling (for those of you in HR, are your eyes glassing over yet?) The sheer fact we need to put structures around it is like being married to someone who doesn’t speak the same language; the band may unite you, but it doesn’t necessarily make anyone very happy. As soon as you have to embark upon an organization-wide review of pay bands, you’re already behind the eightball. By the time you’re done, your results will be old, not to mention already behind, as new roles and sub-specialties have emerged due to today’s rapidly evolving workforce and economy. If you’re not sold on this, ask yourself, if we were a new company of just ten people would we do it this way? If the answer is no, even if you cannot change your comp strategy tomorrow, at least you know having a rigid “structure” may at times work against you in retaining top talent. I’m not saying go rogue, however maybe find a way to make processes more efficient – fewer steps, minimal gatekeepers, and a little time from busy people to land on a fair review.

  7. Paycheques have become invisible. Remember when you got a chance to go to the bank, perhaps even a teller, to deposit your paycheque? Now, most are just automatically deposited into the bank. My husband doesn’t even get a statement. It’s like showering. You don’t even think about it. If you get given hundreds or thousands of dollars from a stranger, you’d be pumped, right? We’ve made getting paid so bland. People get more excited about getting paid than carbs. Sure, do direct deposits, but make sure people know, “woohoo, it’s payday!”

  8. Paycheques are impersonal. No one ever hugged their paystub when they fell asleep. Sure, there’s peace of mind by getting paid, but the money itself is often tied to negative things (“Oh man, I have to pay the bill,” “I wish I could pay my mortgage down faster,” “I should really start saving for my kid’s education”). You’re giving buckets of bills, yet there’s often a “not enough” association with money. Find a way to be part of a positive association with the paycheque by linking it to things your employees care about (e.g., offer to invest part of every paycheque toward a kid’s RESP). Your servant mentality by helping people feel good about their paycheque is above and beyond, and you’ve not been tied to a value people have by helping them make a dream a reality (e.g., “my workplace helped me save enough for my kid to go to college”).

  9. Paycheques are important yet soon become “meh.” Paycheques are like wallpaper. It’s there; you picked it, it’s pleasing, however before long, you would only notice if all of a sudden it were gone. Reinforcement of what made the paycheque matter is important to bring attention and connection to the value brought to the workplace and the paycheque that followed. Otherwise, a paycheque is devoid of personality. It’s monotone. Discretionary effort doesn’t necessarily fall from simply getting paid. When people feel appreciated doing what they are paid to do, they feel motivated to keep doing what’s working and what our culture reinforces its values.

  10. Paycheque overshadows the headlines. Benefits are becoming a competitive field for acquiring talent, and yet it is often an afterthought. Let’s say you offer an amazing prospective employee a salary, and then you have eight bullets of benefits; where does your eye go? To the volume, right? What if you offered higher pay but a boring benefit package (here’s a brochure of stuff.) Worse yet, a benefits package that works for the insurance company’s gain of being full of caps with no flexibility to adjust to your needs. The paycheque is the stage, and the benefits are the show. People don’t pay to sit in the theatre. They come for the experience. Your benefits package, adding on a healthcare spending account, planning “pop up” perks such as wellness series when stress is peaking, now these are the places you can compete on and win.

  11. Paycheques only work for internals. Fulltime, salaried roles as the dominant workforce makeup is a retro concept. Contract workers, consultants, project-based experts and other evolving workforce solutions are often essential to help your organization adjust, adapt, evolve, innovate and transform. To adjust to fluctuations, market changes, customer wants, and labour trends, as well as to be better able to innovate, reimagine and stay fresh, you will no doubt need temporary workers, experts, and other innovative roles that don’t fit into the norm; these folks don’t always get a “paycheque.” Suppose every cool person needs to go through a painful recruitment process to get 3 hours a week of work, or the most innovative thinkers need to fill out a 20 page RFP (request for proposal). In that case, you’ll find yourself on the recruitment hampster wheel (not to mention burn through your procurement team’s capacity). To pay for time, expertise, and emergency business decisions that involve people knowing that the solution will often fall outside of the traditional paycheque and employment contract structure.

  12. Paycheque can’t compete with appreciation. Every person may get paid, however not all feel they are valued. Pay does not equal feeling valued. Recognition, on the other hand, fuels positive feelings and beliefs. If you believe that it really matters if you show up tomorrow – your colleagues, boss, or customers would miss you and your talents if you didn’t – you and your discretionary effort come to work with you. When you lay your head down at night, you think about the impact you made; I’ve never met someone who wrote $312.68 minus deductions on a piece of paper and cuddled with it as they went to sleep.

image of a desk with a cup of coffee, glasses, pen and a book of employee benefits Okay, so this is not to diss how we’ve led our HR policies, organizations and comp programs. I hope you’ve been able to think a little differently about paycheques in their traditional sense so you can adjust, adapt and reimagine a workforce design a little less encumbered by the pains of the paycheque mentality. Comp and benefits can be your freedom or your jail. The choice is yours.

Curious about how your organization can reimage the employee experience? Let’s talk.

Looking for more helpful resources? Check out these past blog posts:

Did you know…

We have many virtual programs designed to support you and your team in our rapidly evolving workforce.

Case in point: The Side Hustle Solution

Do you know a few employees who have a side hustle, and you want to find a way to keep them? Do you think there might be a benefit of curating an “intrapreneurial” mindset? Want to find a way to retain part-time and casual staff by helping them to be successful in their side hustle (so they don’t need to leave you for full-time work?) Maybe you can support some employees to experience the benefits of a paycheque, great colleagues, and exciting career prospects by working for you while also helping them be successful in their side biz. It’s the power of both/and philosophy of work. Let’s help people experience the best of all worlds – work, solopreneurship, and lifestyle. Check out our Side Hustle Solution.

“There is more hunger for love and appreciation in this world than for bread.”

– Mother Teresa

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