How to Balance Pay Compression With Pay Equity

How to Balance Pay Compression With Pay Equity

Let’s Talk About Pay Compression and Pay Equity

In today’s competitive market, many companies struggle with pay compression and equity. Both can negatively impact morale, making it difficult to retain employees. Although related, pay compression is a function of today’s competitive labor market. Pay equity has become a movement in which employees want to know that their employer is paying its people fairly throughout their organization. Watch our webcast to learn more.

Alden Aikins, our Solutions Consultant & Product Specialist at Salary.com, will walk you through how to manage pay compression and what steps you can take to avoid it.

This webcast will cover the following topics:

  1. Pay compression and how it can impact your company.
  2. Pay equity and what you can do about it.
  3. The connection between pay equity and pay compression.


What is Pay Compression?

Pay compression is when new hires are paid at a higher rate than current employees who do a similar job and have tenure. Several factors driving pay compression include an increased cost of living, inflation, and a tight labor market due to a shortage of skilled workers or a lack of available labor in a specific geography. The impact of pay compression can be significant because it can lead to wage gaps.

What is Pay Equity?

The meaning of pay equity has been expanded from the concept that employers pay employees similarly for comparable work to one where employees want to know that they are being paid fairly and that everyone else is also. When an employer has a systematic practice of paying some employees more than others, it can lead to pay equity violations and impact employee morale and engagement.

The Connection Between Pay Equity and Pay Compression

To learn more about the connection between pay equity and pay compression, be sure to watch our 20-minute webcast.

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