What is the hidden factor that ensures that your top talent leaves the door?

A few months ago, a founder I was mentoring called me in a panic. He had just lost his lead developer—the third person to leave his startup in six months—and he was having a hard time understanding why.

“We have a great culture,” he said. “Flexible hours, team lunches, even off-site. But people keep leaving.”

I asked him a simple question: “Do you pay them well?”

There was a long pause. Then he admitted something I’ve heard from more founders than I can count: “Probably not. I thought they believed in the mission.”

Don’t get me wrong: mission is important. That includes flexibility, culture and all the other benefits we try to offer. But if you don’t reward your best people fairly, none of that will matter for much longer.

I see this mistake often, especially in early-stage startups where cash is tight and optimism is high. Founders assume that loyalty comes only from faith. But faith doesn’t pay rent. It doesn’t build loyalty. And when a great employee leaves, he takes a lot more with him than just his job title.

The truth is simple: if you want people to stay, you have to pay them that way.

Related: Your employee wants a raise. Here are 7 ways you can afford it.

The real cost of not paying enough

When a talented employee leaves, it’s easy to write it off as a recruitment problem. You just find someone new, right? But in reality, the costs are much higher – and harder to quantify.

You may have heard the oft-repeated statistic that losing an employee can cost a company up to twice the employee’s salary. Factoring in lost productivity, recruiting time, and onboarding, I’ve come to the conclusion that this is largely true. From a purely financial perspective, that “money saved” on salary is a questionable trade-off at best.

But the financial hit is just the beginning. You also lose institutional knowledge, project history, and an established understanding of your company’s idiosyncrasies.

Furthermore, the effects of employee turnover spread far beyond the specific person who left. Especially with small teams, one departure can cause a chain reaction. Projects get stuck. Morale drops. Colleagues wonder if they should also update their resume. Overcoming these types of disruptions is not easy; it takes months to retrain, rebuild confidence and get your team firing at full speed again.

Simply put, underpaying talent may save you in the short term, but it will almost always cost you more in the long run.

Fair payment is pain

How do you know if you are paying your employees enough? I have a simple rule of thumb: it should hurt a little.

What I mean by that is that if you completely like their salary – if it doesn’t make you hesitate a little – you’re probably not paying them enough.

That discomfort is not a red flag. It’s a sign that you view compensation as an investment and not just a line item. And it’s the price you pay for long-term loyalty, trust and performance.

In the early days of Jotform I lived by this rule. As a bootstrapped founder, I put everything I had into the company. At the end of the workday, my employees got into their cars and drove home. I would walk two kilometers to the bus station. Not because I couldn’t afford a car, but because I chose to spend that money well on my team.

Some of them had just graduated when they joined. Within a few years they had their own cars. That wasn’t just a milestone for them. It was a signal that I was building a workplace worth staying in.

And many of them stayed – five, ten years or more. That kind of loyalty doesn’t come from ping-pong tables or corporate swag. It’s because you’re paid – and valued – like a professional.

Related: People Only Really Care About These Three Things at Work – Do You Offer Them?

Beware of your blind spots

According to recent research According to Gallup, self-reported employee turnover risk is at its highest level since 2015. Leaders are often blindsided by these deviations, especially because they assume employees will speak up if they are dissatisfied. In reality, this is often not the case: 36% of voluntary departures indicate that they had not spoken to anyone prior to their decision to resign.

In my experience, top performers in particular do not want to appear ungrateful. Plus, they’re often too busy doing great work to raise the issue. But even the most goal-oriented employees have bills to pay. If they feel financially undervalued, it doesn’t take long for that dissatisfaction to turn into a job search.

While many factors determine employee happiness, not recognizing compensation as a retention lever is a major missed opportunity. When you proactively reward excellence, you send a clear message: we see you. We want you to stay.

You don’t need a million dollar budget to get this right. You just have to change your mindset. Paying fairly is not a luxury reserved when you make a profit; it’s about how you build the kind of business that gets there.

A few months ago, a founder I was mentoring called me in a panic. He had just lost his lead developer—the third person to leave his startup in six months—and he was having a hard time understanding why.

“We have a great culture,” he said. “Flexible hours, team lunches, even off-site. But people keep leaving.”

I asked him a simple question: “Do you pay them well?”