In Order to Hire, I Have to Pay More Than I Am Paying Current Employees – Help!


Voluntary turnover is at a 10-year high which means businesses cannot afford to get compensation wrong. This is painful when you have current employees you are paying less than the market rate. I could tell you that you should, on an annual basis, do a survey of salary ranges by job and make the adjustments needed rather than waiting to find this out when you needed to hire, but that’s not very helpful to you now.

Losing current employees in this market is not a good situation either, especially when they are already trained. 

What is an owner to do?  You have several options. 

  • One thing you might do to protect your current employees from Loss Is to set up salary banding.  What is salary banding?  It allows you to have different levels within a job such as Customer Service Rep I or IV.  This will help you If you are hiring someone Who has higher level skills than someone who is currently in the job. You can put current employees in a Band and show them how they can get to the higher-level.

  • Of course, you can give your current person a raise as a second option.

  • Lastly, you can do nothing and see what happens.

In preparing this blog I did a Google search to see what many business owners do in this case. What I found was hundreds of articles written on how to approach your boss when you find out you are getting paid less than your new coworker.  If you do nothing, put your case together so you are not blindsided when your employee comes in and asks about this discrepancy.

Here are some things you may want to think about in advance:

  • Are the two positions really exactly the same?

  • Has the position of the lower-paid employee changed or evolved since she was hired?

  • Were there times when the lower-paid employee went above and beyond the call of duty?

  • What is the comportment and attitude of the lower-paid employee?

  • Is there a skill the higher-paid employee has that the lower-paid one doesn't?

  • If the lower-paid employee left the workplace today, would the loss hurt the organization?

We suggest you do pay banding on an annual basis and get help if you need it.