Pay Compression Checker
Pay compression happens when the pay gap between levels — or between new and tenured staff — becomes too small. This checks the differential between two salaries and flags a narrow or inverted gap.
Enter the pay of a lower role (e.g. a senior employee or subordinate) and a higher role (e.g. their new hire or manager).
Indicative only. For pay decisions that matter, our consultants provide the full methodology and market data.
How to check for pay compression
- 1Enter the two salaries you want to compare (e.g. manager vs. subordinate, or tenured vs. new hire).
- 2The tool calculates the percentage differential between them.
- 3Review the flag: a narrow or negative (inverted) differential indicates pay compression that may need attention.
Frequently Asked Questions
What is pay compression?
Pay compression happens when the pay gap between job levels — or between long-serving staff and new hires — shrinks to the point where it no longer reflects the difference in responsibility or experience.
What causes pay compression?
Common causes include rising market rates for new hires, minimum-wage increases, long gaps between internal pay reviews, and promotions made without an adequate pay adjustment.
What is pay inversion?
Pay inversion is the most severe form of compression, where a more junior or newer employee earns more than a more senior or longer-tenured one.