When salary is just the beginning of the agreement: what truly motivates employees today?

Ten years ago, a salary increase guaranteed stronger employee loyalty for a long time. Today, it more often immediately raises a natural follow-up question: “And what else can I expect?” There is increasing discussion in the labor market about declining employee motivation, but the problem does not always lie in the level of pay.

According to the international consulting company Gallup, global employee engagement reached only 21% in 2024, and positive evaluations are influenced not only by salary but also by leadership quality, clear goals, and opportunities for growth. Data from the U.S. research center Pew Research Center shows that while salary remains the main criterion when choosing a job, flexibility and work–life balance are becoming almost equally important.

Evelina Latyšovič, Head of Business Operations at ManpowerGroup Lithuania, says that today it is worth talking about a kind of “inflation” of benefits – additional incentives offered by employers.

“Salary is the fundamental condition of an employment relationship. If it is insufficient, nothing else works. But when the offered salary reaches the market average, additional elements of the job offer are evaluated: health insurance, flexible working models, additional days off. These are becoming a kind of ‘holy trinity’ of the labor market,” she notes.

According to the expert, health insurance is no longer a special advantage in many sectors – it has become a basic standard, sometimes referred to in HR as a hygiene factor. Flexible working hours and the ability to combine office and remote work remain one of the strongest competitive advantages for employers. Additional days off, especially those linked to personal occasions or emotional and physical well-being, are increasingly seen as real value rather than a symbolic gesture.

The effect is not necessarily long-term

Research on hedonic adaptation (the phenomenon where people quickly get used to positive changes and they become the new normal) shows that people adapt to a salary increase relatively quickly – often within 3–6 months. After that, motivation returns to its previous level.

“This does not mean salary is unimportant. However, it alone is not enough to ensure long-term engagement. We see that candidates first look at salary – it is the foundation. But if offers are similar, especially in competitive fields like IT or finance, comparisons begin: what kind of work culture can I expect, what benefits did I have before, will my situation worsen?” says E. Latyšovič.

At the same time, some employees clearly communicate a message to employers: it would be better if the salary were higher rather than adding another benefit. If base pay lags behind the market, additional perks may look like an attempt to distract from the real issue. Such alternatives are not necessarily cheaper – sometimes they require even greater investment than simply increasing salary. Ultimately, this strategy can also cost employee loyalty.

A tool to attract attention or real innovation?

In recent years, more unexpected employer initiatives have appeared worldwide—from covering medications for weight management to aesthetic procedures or so-called “Botox leave.” Some companies announce they will pay for vision correction surgery, fertility treatments, breast implants, aesthetic dentistry, hearing aids, or even offer unlimited vacation.

“Formally, a person can take as much vacation as they want, and the employer does not limit it. It sounds impressive, but in practice limits still appear – how much time you can actually afford to be away while ensuring work gets done,” comments E. Latyšovič.

In her practice, there have also been exceptional individual negotiations – one candidate agreed to consider an offer only on the condition of flying business class, always having meals paid for in high-end restaurants, and receiving a weekly massage. “The client really wanted this specialist, so they agreed to these conditions. This shows how intensely companies sometimes compete for talent.”

Some of these “extreme” initiatives, according to the expert, come from startup culture and younger generations who are not afraid to openly express their expectations. In Lithuania, many trends still arrive later – often first tested in the U.S. or Western Europe.

Some topics are still considered sensitive in Lithuania. For example, companies in some countries already offer women additional days off during menstruation. According to the expert, the issue is broader – not just about a specific benefit, but about organizational maturity in recognizing real human needs and addressing topics that are still considered taboo.

At the same time, innovation is not only about “wow” effects. More practical benefits are also gaining ground – such as financial literacy programs, employer contributions to third-pillar pensions, investment or personal finance courses, and life insurance. According to E. Latyšovič, these may have a greater long-term impact than one-time entertainment or unnecessary perks.

The era of personalization – and new challenges

There is a growing shift away from a “one-size-fits-all” benefits package toward allowing employees to choose. Different life stages bring different needs – one person values pension savings, another prioritizes flexibility or a learning budget.

One solution is the emergence of digital platforms that allow employees to decide how to use their allocated benefits budget.

“People are increasingly willing to accept lower-value benefits if they can choose them themselves. This is especially evident among younger employees. They value benefits that are still not standard – extra vacation days, paid education, or the ability to work from anywhere in the world. However, organizations often waste resources on benefits that are not relevant to their employees,” says Vidmantas Šiugždinis, board member of the employee engagement platform MELP.

According to him, standard offers no longer work. Employers who take a strategic approach to benefits – as a way to build connection, loyalty, and reputation – are the ones who succeed. “The rest risk remaining observers,” he says.

According to E. Latyšovič, all these practices show a clear direction – personalization is becoming the norm. However, it also brings practical challenges, as it requires a mature culture and transparent communication:

“If one employee receives what they truly need to perform their job, another may want the same simply because a colleague received it. This can create uncomfortable situations and a sense of inequality. Sometimes it becomes easier to offer the same to everyone—or… to offer nothing at all.”

Small things that matter

The labor market in Lithuania has already moved past once-popular perks like “pizza Thursdays”—today they are unlikely to be seen as a competitive advantage. “Like fresh fruit in the office—it will probably always remain a pleasant detail, but it is certainly not worth highlighting in job ads. It may even create the impression that there is little else to offer. However, it is still worth mentioning during interviews, as it is not yet a market standard,” jokes E. Latyšovič.

The HR expert emphasizes that not all motivating initiatives are expensive. Simple but thoughtful actions can have a strong emotional impact – such as a small budget for team initiatives, a warm farewell to a departing colleague, or a thoughtful onboarding experience that shows every person in the organization matters.

“With the team, we have organized simple quizzes with symbolic prizes – and the reaction was stronger than after expensive events costing thousands. People remember the emotion, not its price,” shares E. Latyšovič.

She predicts that the market will see even bolder initiatives as it responds to increasingly high expectations from younger generations. However, despite changing trends, the fundamentals will remain – competitive pay, flexibility, and genuine care for employee well-being.