One bad pay decision can cost a company more than $10,000 per employee, new research finds
Fortune – Tech
fortune.com
Summary
A superstar hire can command a superstar salary. The problem comes when only the salary lives up to the billing. It is a long-term allocation of capital that can shape pay equity, retention, and labor costs for years. Those costs can come from correcting underpayment, carrying an inflated starting salary through future raises, or losing employees over perceived pay inequities. And of those, 18% say they would leave the company if the policy were withdrawn. Individual offers can shape labor costs and internal pay dynamics for years, while employees increasingly expect clarity around how pay is determined. For CHROs, that makes a clear pay philosophy, including how exceptions are handled, a matter of workforce strategy and financial discipline. Once that ownership is clear, the next step is turning the company pay philosophy into a policy that can actually guide hiring decisions. For CHROs, the test of a pay policy is what happens when a coveted candidate asks for more. It feels counterintuitive to be told AI is a priority while waiting weeks, or even months, for approval to use these tools.
From the source
Good morning! A superstar hire can command a superstar salary. The problem comes when only the salary lives up to the billing. Six months in, an employer may realize it overpaid. The paycheck, however, is unlikely to shrink, says Syndio CEO Maria Colacurcio, whose company provides pay intelligence software. Instead, employers may freeze future merit increases or ultimately part ways with the employee. That dynamic makes the initial offer more than a simple recruiting decision. It is a long-term allocation of capital that can shape pay equity, retention, and labor costs for years. A new analysis from Syndio, released today , puts the cost of a mismanaged pay decision for a new hire at between $5,257 and $10,454 over the employee’s lifecycle. Those costs can come from correcting underpayment, carrying an inflated starting salary through future raises, or losing employees over perceived pay inequities. At the same time, employees are paying closer attention to how companies make and commu
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