Glossary Term: Wage Compression

Definition

Wage compression is a situation that can develop when gaps between the general wages in a particular industry shrink between employees regardless of a difference in knowledge, qualifications, skills or experience.

Why does wage compression occur in organizations?

Wage compression commonly occurs when starting salaries or hourly wages are set too close to the compensation of existing workers. In today’s labor market, companies are fighting hard to secure top talent—especially as demand is exceeding supply.

Is wage compression illegal?

Wage compression is not by itself illegal, but it can be a slippery slope to other harmful or illegal practices. One group that experiences wage compressions in the current market is lower-paid hourly workers.

Global offices

The leading global digital coaching platform

CoachHub is the leading global talent development platform that enables organizations to create a personalized, measurable and scalable coaching program for the entire workforce, regardless of department and seniority level. By doing so, organizations are able to reap a multitude of benefits, including increased employee engagement, higher levels of productivity, improved job performance and increased retention. CoachHub’s global pool of coaches is comprised of over 3,500 certified business coaches in 90 countries across six continents with coaching sessions available in over 60 languages, to serve more than 500 clients. Our programs are based on advanced R&D from our Coaching Lab, led by Prof. Jonathan Passmore and our Science Council. CoachHub is backed by leading tech investors, including Sofina, SoftBank Vision Fund 2, Molten Ventures, Speedinvest, HV Capital, Partech and Silicon Valley Bank/SVB Capital. In September 2021, CoachHub acquired French digital coaching pioneer MoovOne to build a global champion focused on jointly democratizing coaching. CoachHub is committed to creating a greener future and is a certified carbon neutral company since 2022.
This site is registered on wpml.org as a development site.