HRdownloads Blog

Under Pressure: Wage Compression from Pay Increases

Posted by HRdownloads on Jan 18, 2018 2:30:00 PM

With significant increases to minimum wage in certain provinces, many employers are becoming more concerned about the negative effects on their businesses that come along with the growth of their employees’ pay. One of these concerns is wage compression. Wage compression is a situation that develops when gaps between wage scales shrink despite a lack in change of qualifications, skills, or experience. With wage compression, employees who have worked for an organization for a longer period of time, have greater responsibilities, or have a better performance record make similar wages to new hires, employees who are lower on the company hierarchy, or employees who have not performed as well as their co-workers.

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Topics: Minimum Wage, Wage Compression

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