WALTHAM, MA (March 16, 2022) -- Salary.com’s Garry Straker, Senior Compensation Consultant at Salary.com, was a featured presenter at the 2022 WA State SHRM Employment Law & HR Conference on March 11, 2022. This annual professional development conference is the largest HR gathering in Washington State.

In his presentation “The Dichotomy of Salary Compression and Pay Equity: Coexisting with Confidence” Straker shared with attendees how today’s tight labor market has organizations increasing pay for new hires leading to salary compression, which in turn can pose a threat to an organization's pay equity balance and undermine organizational culture and trust.

The Labor Department has reported job changers are seeing wage gains that significantly outpace that of employees who stay with their current employer. Ironically, increasing salary rates in order to attract new hires may in turn lead to higher turnover, if incumbent employees feel they are not being treated fairly. Inflation reaching 7.9% is compounding concerns. There is increasing pressure on organizations to provide Cost of Living Adjustments across their entire workforce.

Funding for significant pay increases was in sharp focus in Salary.com’s recent Pay Practices and Compensation Strategy Survey. Half of the organizations surveyed (52 percent) increased funding for merit increases, a significant jump from the 19 percent of organizations that did so the prior year. The survey also reported a bump in bonus funding, with 39 percent of organization increasing funding for bonuses and short-term incentives, compared to 29 percent in the year prior.

Straker’s presentation offered insight into how organizations can effectively manage wage compression in a way that does not increase pay equity liability, or negatively impact organizational culture, while supporting employee retention goals. He provided insights on how to evaluate pay data for compression and pay equity; the role of market data in the analysis; and best practices for managing compensation so organizations can effectively manage pay in a sustainable way.

Straker cautions organizations to manage salary increases judiciously, so as not to exacerbate pay disparities.

To learn more about how wage compression may be impacting your organization, click here to contact Salary.com’s Consulting Team.