Pay Compression & Equity
When Loyalty Costs Employees More Than It Should
It’s a scenario more common than most companies realize: a new hire walks in the door with a higher salary than a 10-year veteran doing the same job. The numbers may be different but the result is the same: frustration, disengagement, and ultimately, turnover.
This is pay compression in action. And it hurts morale and it creates real risk.
For growing companies, these issues often build up quietly, hidden behind hiring urgency or flat budgets. But eventually, they surface. When they do, they damage morale, erode trust, and in some cases, create legal exposure.
Equity Matters Too
Closely tied to compression is internal pay equity. This is the principle that employees in similar roles should be compensated fairly, regardless of gender, race, or other protected characteristics.
These are culture issues as well as compliance issues. Employees don’t need to see the spreadsheets to feel whether something’s off.
You Can Get Ahead of This
Fixing compression and equity concerns doesn’t require overhauling your entire system. But it does require the willingness to step back, assess where gaps may exist, and realign where needed. Companies that address pay compression and pay equity issues head-on send a strong signal: we value fairness and we value our people.
If you’re sensing pay misalignment in your organization, or simply want to get in front of it before it becomes visible, let’s talk.
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