x
Breaking News
More () »

'Pay compression' is happening in Texas. Yes, some co-workers hired after you may be making more money than you

Many employees are now planning to ask for a raise. And many employers may be open to offering increases.

DALLAS — Not trying to get anything started at your workplace… but just curious: Is a new person in the office making more money than you? Are all the new hires doing better than you? 

If not, are they earning really close to what you’re getting, even though you’ve been there much longer? It’s quite likely. 

Pay compression is as uncomfortable as it sounds. And in a lot of workplaces, it is making people uncomfortable. 

Here’s how pay compression happens: You’ve been the good worker, putting in long hours and hard years. And you’ve gotten some raises along the way, but with 10 and 11 million open jobs like we have seen across the country in recent months, employers have had to fiercely compete for available workers in a shrinking labor pool. 

So, they’ve been bringing in new hires at much higher pay. 

But what about you… the loyal longtime employee? Did you get a commensurate raise? Maybe not. 

New data from human resource consulting firm Robert Half shows that 56% of managers surveyed recently said there is pay compression happening in their workforce. Of those 56% of executives who are seeing this, 62% are reviewing salaries and are trying to bump up the pay of their more tenured employees.

That may be a wise idea. 

Robert Half also found that the majority of workers are getting restless and are planning to ask for a raise this year. Further, they found that 27% of workers said if they don’t get a raise, they plan to look for a new job. 

And there are lots of jobs to be had. 

So, does it make sense for companies to onboard new people at higher pay but not raise up their long-timers, only to lose them and have to repeat the cycle all over again? 

WFAA's Jason Wheeler reported earlier this year about the data that shows you are likely to get a much bigger raise if you jump to a new job than stay at your current on. And if you think this isn’t happening in Texas–for many months we have gone back and forth, leading the country with the highest number of job quitters or the most people hired. 

A lot of workers know if their employer isn’t paying them right, somebody else may, and they’ve been jumping jobs. And newly released data from the Bureau of Labor Statistics shows that as of February, Texas had 932,000 open positions.