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Dear Workforce What Do We Do About A Possible Pay Imbalance

Significant differences between a recruit’s market value and that of senior staffers should prompt you to assess whether your compensation structure is competitive.
September 2, 2001
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Related Topics: Compensation Design and Communication, Dear Workforce, Compensation
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Q

Dear Workforce:

I am recruiting a highly desirable candidate for our technical developmentteam, but there's one problem: we can only get him at a salary that's three tofive times higher than the senior-most person on the team. The candidate has acomparable skill level but two fewer years' experience than the senior staffmember.

Do we go ahead and pay his asking price, thus giving rise to an imbalance inour pay structure? Or do we revise our senior technician's salary to offset theimbalance?

-- Betwixt and between, senior executive-HR, software/services, Mumbai,India.

A Dear Betwixt:

In the work world we are moving into relationships with employees that needto be specific to each individual. That is why we have one-to-one relationshipsrather than one-to-many relationships. This provides the flexibility needed toaddress the differing needs of each person. And this is the most effective wayto attract and retain valued talent. With that in mind, it is important tonegotiate compensation for your new recruit that matches his market value.

The significant difference between your new recruit's market value and thatof your senior-most employee raises questions that should prompt an assessmentto see if your compensation levels are competitive. A multiple three to fivetimes higher seems excessive and also calls into question the claims of the newrecruit.

Salary is only one part of the relationship with the employee. Employeebenefits, support for development, and recognition of flexibility in workingarrangements can be equally important. For your existing employee, it will beimportant to understand which factors are of greatest importance and respondaccordingly.

SOURCE: Ron Elsdon, director, retention diagnostic services, Drake Beam Morin, San Jose, Calif., April 25, 2001.

LEARN MORE: See "Can the Internet Help You Hit theSalary Mark?"

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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