Once salary inversion happens, fixing it is costly. So, preventing it will be a better idea.
Proposal #1: Treat Hiring Decisions as Pay Strategy Decisions
Before approving an offer, consider:
• Is this offer higher than what existing incumbents earn?
• Will people question the fairness of this offer internally?
• One year from now, will this decision be challenged?
If the answer is yes to these questions, the offer should be reviewed. This indicates a pay governance issue.
Proposal #2: Maintain Clear & Enforced Salary Ranges
Salary ranges are controls.
Create a salary guideline with:
• A defensible minimum
• A realistic midpoint
• A clear ceiling
To reduce inversion risk, junior hire offers should generally sit below the midpoint.
Proposal #3: Adjust Senior Pay in Parallel with Market Movement
If the market is moving up, senior pay cannot remain flat.
When market corrections are made for new hires, incumbents (esp senior employees), must be reviewed first or at least concurrently.
Proposal #4: Use Market Tools Without Breaking Proposal #2
When a stronger offer is needed to attract critical talent, consider:
• Sign-on bonuses
• Temporary incentives
• Retention allowances
Don’t solve a temporary problem by permanently inflating base salaries.
Proposal #5: Run Regular Salary Compression & Inversion Audits
At least once a year, review:
• Junior vs. Senior Pay Ratios
• New Hire Pay vs. Incumbent Pay
• Alignment between tenure, contribution, and pay
As the saying goes, prevention is better than cure.
Proposal #6: Communicate Progression & Correction Paths
Be clear about:
• How pay progression works
• What is being reviewed
• When corrections are expected
A strong pay strategy is one that the organisation can defend, sustain, and explain.
I hope these proposals are useful to those with the responsibility and influence over pay structures.
Happy New Year 2026!
xoxoxo
