This whitepaper addresses the challenge of pay compression, where newer or less experienced employees earn as much or more than seasoned colleagues, often due to rapid market changes and rising wages for new hires. It explores the causes, such as outdated salary data, inflation, and a competitive labor market. The paper emphasizes agile compensation management, suggesting continuous market adjustments and regular pay analysis to prevent pay compression and ensure equity. It also outlines tools and strategies, including Payscale's software, to help organizations monitor and address pay compression effectively.

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