Understanding talent attraction: The influence of financial rewards elements on perceived job attractiveness

Abstract

Orientation: In order to attract knowledge workers and maintain a competitive advantage,it is necessary for organisations to understand how knowledge workers are attracted todifferent types and levels of financial rewards.

Research purpose: This research investigated a set of financial reward elements (remuneration, employee benefits and variable pay) to determine whether knowledgeworkers perceived them as attractive inducements when considering a job or position.

Motivation for the study: In South Africa there is a shortage of talent, largely due to highrates of emigration of scarce skills (human capital). Financial rewards or inducementsare necessary to attract talent and it is essential to assess which of these rewards are mostsuccessful in this regard.

Method: A 2³ full-factorial experimental design (field experiment) was used. The threefinancial reward elements (remuneration, employee benefits and variable pay) weremanipulated in a fictitious job advertisement (each at two levels). Eight (2 × 2 × 2 = 8) differentversions of a job advertisement were used as a stimulus to determine the effect of financialreward elements on perceived job attractiveness. A questionnaire was used to measure howparticipants perceived the attractiveness of the job. A convenience sampling approach wasused. Different organisations throughout South Africa, as well as corporate members of the South African Reward Association, were asked to participate in the study. Respondents (n = 169) were randomly assigned to the various experimental conditions (i.e. one of the eightadvertisements). Data were analysed using descriptive statistics. A full-factorial analysis ofvariance was used to investigate if significant main effects could be found.

Main findings: Participants considered high levels of remuneration, the inclusion ofbenefits and variable pay to be significant job attraction factors within a reward package. Remuneration was found to have the largest main effect on job attractiveness of the three. Gender, race and age did not have statistically significant main effects on job attractiveness.

Practical/managerial implications: High levels of remuneration, benefits and variable payshould be incorporated and emphasised in organisational talent attraction strategies as theyare attractive for knowledge workers. If organisations want to attract prospective talentthey need to offer high levels of remuneration to make their offers appealing and attractive.Variable pay and benefits are, further, not sufficient to mitigate a low remuneration offer.

Contribution: This study adds to the body of social science research as few studieshave empirically demonstrated a causal link between financial reward elements and jobattractiveness within a controlled laboratory environment. There is also limited empiricalresearch in South Africa that highlights the level and combinations of financial rewardelements that are attractive for talented knowledge employees.