Though offering more money is the single biggest way to keep staff, employers say a combination of flexible working and better careers is more effective.
A survey of 1500 New Zealand employers by recruitment company Hudson found that 29 per cent said financial rewards were the best ways
to retain workers.
But money alone wouldn't keep staff happy and satisfied in their jobs, said Hudson executive general manager Marc Burrage.
And flexible work options was named most important by 22 per cent, formal coaching, at 11 per cent, and leadership development and succession planning, with 10 per cent each.
New Zealanders valued their families and lifestyles, which meant flexible work options were important factors in attracting staff, Mr Burrage said.
Government employers were more likely than private companies to offer these options, such as sliding start and finish times, part-time work and working from home.
The government had taken the lead in promoting flexibility at work, which could be due to "political sensitivity" about using financial incentives to retain staff, he said.
Good retention was about keeping the best workers, not everyone.
"It's about holding on to the organisation's current and future stars -- those who are a good fit with the organisation's values."
A company which trained its managers in interpersonal skills would have a better understanding of who to recruit, he said.
Employees were asking for -- and getting -- more money, because skill shortages in the job market meant employers had less power to say no.
Mr Burrage said South Island employers had higher retention rates than those in the North Island.
"Low turnover for South Island employers may be because people sometimes take up roles there for lifestyle reasons, so are less likely in turn to leave their jobs," he said.
- NZPA
