Talent shortages continue to prevail in many sectors. Employers often need to dig deep to convince new staff to choose them. As a result, new employees earn almost as much as current employees who often have more experience in the job. "When your new colleague with less years of work experience is already earning as much as you, it causes a lot of social distortions in the workplace," warns Özlem Simsek, managing director at international recruitment firm Robert Walters.
Companies think their employees don't talk about their salaries, but they do. Employees who have sometimes been employed for years discover in this way that new colleagues - due to the tight labour market - sometimes earn as much as them. Özlem: "That causes tensions among employees. Once more senior professionals discover this, they soon feel undervalued, or feel that the employer has betrayed their trust. And this dissatisfaction is also understandable, because it is logical that, as a newcomer, you earn less than your colleague with more seniority. The working atmosphere can suffer enormously as a result, and in the worst case, it can even cause more senior employees to resign."
While this can happen almost in any company, it is mainly found in organisations with fixed pay scales. "Employees with several years of seniority started at the bottom of the scale and have made nice strides in salary levels after years of hard work. Due to the tightness in the labour market and the competition for talent, we now see that employers are often forced to offer new employees immediately the top of the same scale as the more senior employee.
In addition, many organisations are hiring staff for their growth potential. "For example, employees are already being recruited for the position of business controller even though they may not yet have all the necessary skills and experience to fill this role immediately. Yet they are already getting the salary for a role they still need to grow into. That, too, causes those rewards to be perceived as unfair by employees who have been working there longer," Özlem said.
But there are solutions. Both employers and employees can take certain actions to avoid such tensions in the workplace. Özlem: "Employers can, for example, assess in advance which employees are at risk of feeling unsatisfied because of the salary of new colleagues by having an open and honest conversation with them about this beforehand. This way, they can reward the more senior employees in a different way by offering other fringe benefits or bonuses. In a tight labour market, as an employer you cannot be blindly confident that the staff you have will stay on in the long term. It is therefore wise to check whether their employees are getting the appropriate remuneration, and intervene where necessary."
But you can also learn to deal with this problem as an employee. "Engage with your employer on this issue. If they are not willing to meet your needs, take a moment to consider what is most important to you: earning more at another organisation or choosing the security you have with your current employer. Keep in mind that organisations that offer huge salaries today are also the ones that will have to let go of highly paid employees once the economy turns, the so-called 'last in, first out' phenomenon. Finally, remember that it is often better to just not talk about your salary with colleagues, as this often leads to dissatisfied and crooked faces in the workplace" Özlem concludes.
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