PAY COMPRESSION STUDIES
Driving retention through fair pay practices
What is pay compression?
Pay compression occurs when the value of each year of experience is lower for longer tenured employees than for newer employees. Unfortunately, given the rapid increase in starting pay for many positions, it's a common problem for organizations. A comprehensive study of your compensation system to determine if pay compression is occurring will help your organization make pay decisions that boost morale and increase retention.
How can DCI help?
DCI uses widely accepted methods to conduct a holistic analysis that accounts for available market data, your organizational structure, your industry, and your goals. The results and recommendations of the analysis will be presented in an executive summary under attorney-client privilege.
Types of Analyses:
Market-Based Analysis
If reliable market data are available, DCI will compare compa-ratios (employee salary divided by market 50th) of employees at several levels of time-in-job or time-in-company. The differences in average compa-ratios at each of these levels will be analyzed to determine if longer-tenured employees are paid lower in the market than less-tenured employees.
Internal-Focused Analysis
If sufficient market data is not available, DCI will test for pay compression by investigating how the average annual pay for higher-tenured employees compares to the average annual pay for newer employees.
Other Pay Equity and Compensation Services:
Pay Equity Consulting
In depth analysis of current compensation, accounting for variable factors and different compensation types, to ensure fairness and merit-based decision making.
Learn MoreCompensation Consulting
Comprehensive consulting providing a roadmap to job alignment and job architecture that includes benchmarking to market data and the creation of pay bands.
Learn MoreEEO Pay Software
Powerful pay equity software for organizations with in house legal, compliance, and compensation expertise that want pay equity analytics on demand.
Learn More
