outsolve insights

Familiar with pay compression? If you're in HR, then you've likely come across scenarios where a new hire is brought in at a salary close to, or even higher than, the salaries of some of your long-term, high-performing employees. That’s pay compression and it’s an uncomfortable, inevitable conversation waiting to happen given the rise in pay transparency laws across the U.S. 

Administering fair compensation practices is not just the right thing to do, it is essential for legal compliance, maintaining a positive workplace culture, and for a company’s overall success. Companies that fail to establish non-discriminatory pay practices expose themselves to numerous risks, including legal penalties, lawsuits, and long-term damage to their reputation.  

Attracting and retaining top talent is more challenging than ever, and that trend is expected to continue. A competitive and well-thought-out compensation structure can make or break the delicate process of hiring and keeping your best employees. It’s not simply a list of pay scales, but a strategic framework on how employees are compensated that helps promote fairness, competitiveness, and compliance.