Why Companies Are Reviewing Pay Raises More Than Once a Year
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What is the main topic discussed in this episode?
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Here's your money briefing for Wednesday, February 23rd.
What is driving companies to rethink annual pay reviews?
I'm J.R. Whelan for The Wall Street Journal. Typically, companies give out raises and make adjustments to pay ranges around the time they conduct their annual salary reviews. But in an ultra-competitive jobs market, some companies are reviewing their pay rates more than once a year.
They're raising wages in order to attract and recruit people. And it's happening so quickly that they're finding they need to keep track of salaries and keep reviewing what's going on with pay.
But while adjusting salaries might help recruit new talent, where does that leave existing staff who've put in years of loyal service? We'll talk with our workplace reporter Lauren Weber about that after the break.
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How are employers using more-frequent pay reviews to attract new hires?
They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
At most companies, employees can expect a pay review and maybe a raise once a year. But now some companies are feeling an annual pay cycle isn't enough, and they're conducting salary reviews more often. So what should workers expect? Lauren Weber covers workplace issues for the WSJ, and she's with me now to discuss. Lauren, thanks for being here. Thanks for having me. So, Lauren, you've spoken with several companies that are actually doing this, you know, doing a salary review more than once a year. Why are they doing it?
The main reason is because the job market is just moving so quickly right now. The labor market is so tight that essential dynamic of supply and demand is just pushing up the price of labor right now. So companies are desperate to hire. There's not enough people out there looking for jobs.
What real-world example shows why companies update pay more often?
Sometimes they have to poach someone from another company. So they're raising wages in order to attract and recruit people. And it's happening so quickly that they're finding they need to keep track of salaries and keep reviewing what's going on with pay so regularly so that they can just keep up with the market. For example, I spoke to a company, a manufacturer in Colorado called CoorsTek. And in order to hire some of the most critical roles that they need to fill, like machinists and operators, maintenance people for their factories, they have to keep raising what they're offering to people just in order to hire enough people for what they need. The economy is really hot right now. They hired 1,300 people in the U.S.
last year. So they're doing a lot of hiring in order to get the people they need. They need to keep pushing up pay.
How do firms roll out multiple pay-review cycles in practice?
So what does this look like in practice? How do companies roll out these multiple reviews?
Some companies are doing this on an across-the-board basis where they're reviewing pay for every role that they have. That's probably more common in smaller firms. In other cases, it's more targeted, like the company that I mentioned, where there are specific critical roles that they really have to make sure they're able to fill. So they might be paying more attention to those jobs and keeping track of where the market is for those roles.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:38
2
What is driving companies to rethink annual pay reviews?
0:38–1:20
3
How are employers using more-frequent pay reviews to attract new hires?
1:20–2:36
4
What real-world example shows why companies update pay more often?
2:36–3:22
5
How do firms roll out multiple pay-review cycles in practice?
3:22–5:13
6
How common are more-than-annual salary reviews across companies?
5:13–6:37
7
What operational challenges make companies hesitant to increase pay-review frequency?
6:37–8:09
8
How could frequent pay increases affect long-tenured employees and cause wage compression?
8:09–9:28
Speakers
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