Addressing Wage Compression in the Fashion Industry

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Pay transparency laws have introduced many benefits, including pay equity and improved negotiation opportunities during the hiring process. However, they have also brought to light a phenomenon known as wage compression, which can lead to dissatisfaction and increased resignations among employees.

Wage compression occurs when the salaries of long-term employees do not keep pace with market rates, while newer employees are offered salaries at the market level. As salary conversations become more open and transparent, wage compression becomes more evident to employees.

To tackle wage compression effectively and retain valuable team members, fashion companies should consider implementing pay adjustments. These adjustments, distinct from yearly salary changes, are typically larger and targeted at individuals on the local team level to address the risk of employee attrition.

Research from various sources indicates that employees who do not receive timely pay adjustments after the hiring of higher-paid team members are more likely to resign sooner. It is crucial for employers to reassure their existing team members of their value and contributions to the company, even in the presence of new hires with higher salaries.

When employees discover salary discrepancies among their peers, it is natural to feel disappointed. Instead of assuming malice on the part of the employer, employees can take proactive steps to address the issue. Here are some tips for those seeking salary adjustments:

Benchmark your salary externally: Gather information about the market value of your role both within your company and at similar organizations using platforms like, and

Prove your value to the company: Highlight how your work has contributed to the success of the organization, your team, and your manager. Focus on the positive difference your contributions have made.

Initiate a friendly negotiation with your employer: Armed with the data from the previous steps, propose a percentage increase range that would be satisfactory to you. Clearly communicate your proposal and support it with a list of your accomplishments.

Fashion companies also play a crucial role in addressing wage compression by developing more sophisticated compensation strategies. This includes using salary benchmarks and providing managers with solid compensation information to facilitate constructive discussions with team members.

By addressing wage compression and implementing fair compensation practices, fashion companies can foster a more motivated and engaged workforce, reducing turnover and retaining top talent in the industry.

Chris Kidd is the owner of,,, and

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