- Organizations are facing difficulties keeping salaries up to date with the rapidly changing labor market. Employees often do not perceive their salaries as competitive and look for higher paying jobs at other organizations.
- As employees are becoming increasingly comfortable discussing pay with colleagues, they are finding out about internal pay gaps through informal mediums. This frequently results in lower levels of engagement, mistrust, and turnover.
- By the time organizations decide to conduct a salary review, pain points have cumulated to be significant, making the process and implementation of salary adjustments a larger task than it could have been if it was prioritized proactively.
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- Haphazardly delving into a salary assessment without ensuring that the foundational elements (e.g. job descriptions, market positioning strategy) are in order will not yield results.
- Implementing remedial salary adjustments without having addressed the systemic issues causing the pay gaps only perpetuates the problem.
Impact and Result
- Adopt a proactive mindset by assigning an annual cadence to salary assessments, at a minimum, and conducting more frequent assessments based on need (e.g. roles or departments critical to operational continuity), to ensure internal and external equity.
- Assess pay gaps for signs of systemic patterns of inequity and investigate organizational practices across the employee lifecycle to identify root causes.
- Avoid losing traction; understand that internal and external pay equity requires sustained focus and commitment.