Pay and perks attract top talent, but they’re not what makes people stay.

We have an imbalance in our workplaces. For years, companies have leaned too heavily on external incentives and benefits to inspire loyalty and performance, and that approach ignores the psychology of motivation. Once people’s basic financial needs are met, what keeps them at a company and helps them grow there is internal reward, not external. A strong salary, a gym membership and other perks may attract top talent, but they’re never the reason people stay.

As a therapist and leadership consultant, I’ve spent more than 30 years studying why people flourish in the systems they’re part of, from families and schools to workplaces. Over that time, I’ve found that healthy systems consistently provide three foundations. CEOs who build and measure these three foundations create companies that attract and keep top talent.

I define leadership as how, and with whom, we exert influence. We influence one another through connection, not force, and no one will follow someone they don’t feel connected to.

Compensation, prestige, equity and benefits may attract top talent, but they don’t create long-term loyalty on their own. If another company can offer it, it isn’t what will keep people at yours. Something deeper has to root a person in an organization, and you can measure it by how connected they feel to its people and culture.

In my work, I often see leaders misunderstand what connection means. Many assume it’s about being nice or offering constant affirmation.

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