Hi, My organization announced that they are adding cost of living adjustment ( due to inflation) to salaries across the organization except for the newest employees.

39 Comments

1. Julie HumbirdJuly 3,2022 at 4:33PM UTC

   I suppose the assumption would be that newhires received a pay increase at hire and are paid at 'market value'. Organizations have issues with paying newhires more than their long-term staff. A friend of mine recently was approved for a new staff addition. The market analysis approved her newhire at very close to what she is making. She was immediately given a $15K raise.

2. AnonymousJuly 3,2022 at 9:56PM UTC

   The COLA is to align people with current pay scales. Ideally new hires were brought in aligned. This also addresses the issue of new hires brought in at market rate making more than the seasoned staff.

3. Kim CallinanJuly 4,2022 at 2:19AM UTC

   My guess is that they already adjusted your salaries when they hired you in order to attract you. They are now adjusting the staff who are being paid lower than the new employees to adjust for the recent cost of living increases and to make it equitable with the new hires. That's just a guess, but the best way to find out is to ask.

4. AnonymousJuly 4,2022 at 5:25AM UTC

   I've never heard of adjusting the newly employed since their salary coming in was market level.

   Employees that have been with company for longer than 18-24 months would be the due an adjustment as their salary is impacted by the economy/cost of living variance.

5. AnonymousJuly 4,2022 at 7:11PM UTC

   That’s so nice! I wish more places would do that.

6. AnonymousJuly 5,2022 at 8:40PM UTC

   That's standard for our non-profit. You can't receive any raises while on probation (generally six months). The rationale is that the starting salary should have been market appropriate.

7. AnonymousJuly 7,2022 at 12:36PM UTC

   Quite common for increases. I started current position end of April. Increases across the board were announced this week...with the exception of people hired in 2022 or those who had already seen some sort of increase promotion this year.

8. C AllenJuly 8,2022 at 12:07PM UTC

   In addition to the comments already made, it can be assumed (in a lot of cases) that newer employees were onboarded at an increased rate already.

9. Judi CardilloJuly 8,2022 at 12:13PM UTC

   Agree with all the other comments. I would add that there are always budgets, and if they need that money to give raises to the older hires, they will find it palatable to take it away from the newer hires…

10. Kate VonDerheideJuly 8,2022 at 12:20PM UTC

    This is pretty standard, as other commenters have stated new hires are brought in at a current market rate while those who have been at the company for a while we’re likely left behind. It’s great that your company is making this adjustment.

11. AnonymousJuly 8,2022 at 12:28PM UTC

    This may be an unpopular opinion, but I am the primary breadwinner for my family and have a son with special needs. I left the public sector for the private sector five years ago as a social worker. I make $60k more, because I have to. I agree with all other commenters that the practice sounds standard. I just couldn’t do it anymore.

12. AnonymousJuly 8,2022 at 12:31PM UTC

    That would be awesome. I work for a large financial institution and they are bring new hires in at a much higher wage than existing employees. My department did NOT get cost of living increases-1-2% is the normal. I work in HR, so I know this to be a fact. They talk about needing to retain talent, but paying more is not happening.

13. AnonymousJuly 8,2022 at 1:33PM UTC

    Same at my company.
    My new employees in the same role are making up to $30k more than my employees with almost 10 years tenure at the company and there’s no funding to bring everyone up to the same level. On top of that, they just updated the current market salary ranges for the role and it turns out everyone on my team is now below range. :(

14. AnonymousJuly 8,2022 at 4:35PM UTC

    Same here and I feel like there is discriminatory ageism running rampant everywhere. Hire in the young for more and wait for the older experienced employees to leave so they have a young staff and lower health care costs. Hard to prove but this is happening everywhere and no one cares.

15. GirlBossanova934974July 8,2022 at 12:31PM UTC

    Newer employees were probably paid "current market rates" when hired. In any case, it is JUL 2022 and 2023 is but 6 months away. So the new hires will have to wait 6 months which is not a large period of time.....

16. AnonymousJuly 8,2022 at 12:39PM UTC

    Could have been like my company where the CEO basically said “inflation is just a fad, it’ll go back to normal we’re not doing anything above 3% if you don’t like it there’s the door.” (A lot of people found the door)

17. Valerie RiegerJuly 8,2022 at 12:44PM UTC

    My guess is that newer employees salaries were in line with the current market rate where the existing employees payrates weren't. Addressing it in 2023 allows the organization the opportunity to assess if the market will even out, and if not, the newer employees would (hopefully) receive a market adjustment/COLA.

18. KaleyJuly 8,2022 at 1:02PM UTC

    My orgnization does the same thing, for new hires we dont adjust for COL until around their first year of employment.

19. AnonymousJuly 8,2022 at 1:20PM UTC

    I am a hiring manager that is dealing with this as well. It is so hard and seems unfair to exclude anyone on a raise, but at my company all new hires brought on in the last year are already getting paid up to 10K more than my long term employees. I imagine that this is the case at many places so I think that it is a good sign that your employer is actively trying to correct this pay gap. It stinks to not be eligible for a raise, but as others have also said, you most likely already got the raise.

20. AnonymousJuly 8,2022 at 1:25PM UTC

    HR here. In my experience from several companies, this is the norm. Currently we have it that anyone that received a pay increase April 1st or after, and all new hires are excluded from the COLA increase taking place 7/1 as they are already reaching the current adjusted amount.

21. AnonymousJuly 8,2022 at 1:48PM UTC

    Not for “cost of living ,” but I’ve been at 2 places now where consultants weren’t allowed to participate in company paid lunch/dinners. The reasoning was that they aren’t perm employees and those meals are perm benefits.

22. Sharon H Kneebone, FASAE, CAEJuly 8,2022 at 1:55PM UTC

    I am a nonprofit CEO. This is the norm. The new hires will likely have already received the adjusted compensation.

23. Darice JohnsonJuly 8,2022 at 2:18PM UTC

    This is the norm in our company. Any new employee, within the year, should already be receiving the adjusted amount.

24. AnonymousJuly 8,2022 at 2:52PM UTC

    It is the opposite at a state government agency where I work where new employees with no experience right out of college are being hired at 10-15 more than long term employees. New hires are making as much and sometimes more than those of us with 10-15 years of experience. This isn’t fair to experienced employees and they wonder why people are leaving in mass numbers.

25. Lisa MarieJuly 9,2022 at 2:32PM UTC

    Be patient. Your organization may soon make this same announcement.

26. J AlexJuly 8,2022 at 2:59PM UTC

    You mentioned the organization is a non-profit. It may not have the budget to get everyone to market-rate immediately, but the leadership wanted to signal to newest employees they have not been forgotten and will get a COLA in 2023. -- Sounds to me like you have savvy leaders who want all to know they are appreciated and the executives have their back.

    At most companies, most employees are hired at the current market rate. That market rate changes over-time and point in business cycle.

    Job Seekers negotiate compensation based on their understanding the job role and responsibilities and what employers are willing to pay for their talent and capabilities.

    COLAs are awarded to retain employees, improve job satisfaction, and endear sentiment which fuels productivity.

    In some instances, where there is little competition for labor, employers hire the cheapest capable person. In such circumstances, even a recent hire may be underpaid. After proving herself competent for a reasonable amount of time (i.e., 6 months), the recent hire should ask for a raise if being undercompensated for the role.

27. Rachel TJuly 8,2022 at 2:59PM UTC

    This is typical. Presumably any employees who joined in the past year joined at market rate, so they don't need a COLA until the following year.

28. Janet ParkhurstJuly 23,2022 at 10:57PM UTC

    Well said, Rachel.

29. AnonymousJuly 8,2022 at 3:48PM UTC

    I saw a few comments touch on this but this is a value added to the organization. A few things, your company shows invested interest in long term employees for retention. They show equitable pay models. As some people have touched on, many orgs will increase comp for new hires in this market to remain competitive but often times new hires will make more than long term employees as a result. I love that your org is doing this.

30. AnonymousJuly 8,2022 at 6:10PM UTC

    My organization provided cost of living (market increase) raises for only the union staff. I was disappointed. Though I understand it is more common for newer employees to NOT receive that increase because they were most likely hired at fair market salary within the last year.

31. Karen Morris RushJuly 9,2022 at 12:41AM UTC

    My company raised minimum wage to 22.00 an hour but did nothing for anyone making just over that after years of service just devalued my experience

32. AnonymousJuly 9,2022 at 1:27PM UTC

    well, if you're a new employee....then I'm presuming you're not due for a raise for one year (unless policy is to give a raise sooner). I don't think what your organization is doing is wrong; they've probably already raised their bottom floor or starting pay to be competitive, and now they are trying to level everyone else out (with inflation) so they don't lose employees to the competition. Be happy!

33. AnonymousJuly 9,2022 at 2:28PM UTC

    Exactly! Some people are just greedy or keep wanting what others have. Especially when they don't deserve it.

34. Paula BrantnerAugust 1,2022 at 1:13PM UTC

    Wanting to be fairly and adequately compensated for your work is not “greedy.” We never seem to apply that word to company owners and shareholders who want to make money from the work that other people do, even though it would usually be more appropriate in that situation.

    Trying to understand the rationale behind salaries and raises is something that every employee has to be monitoring, particularly since some companies have and reinforce inequities through how they pay people. If you’re not paying attention, then you might not realize this is happening. Transparency is the best practice, but many companies fight very hard to ensure employees don’t know what is happening with salaries and raises.

35. Lisa MarieJuly 9,2022 at 2:22PM UTC

    Whether common or not, an organization can frame their policies and perks however they see fit.

    That being said, my view is the company's reasoning (as it would be mine), is that the salary for new employees are (or *should* be) already adjusted to be attractive to prospective candidates- to include considerations for the current inflation/financial climate.

    With the current increases across the country, current employees whose annual increases which is commonly 1.5 to 2.5% or 3 to 5% at the high end, wouldn't necessarily have their salaries increased sufficiently to match the ridiculous increases househoulds are facing at this time.

    Another way to look at is this... 2023 is less than 6 mths away, and new employees who probably haven't even been "fully immersed in the company," yet needs to simply chill and stop wanting a perk reserved for employees who have been with company for a longer period of time.

    New employees need to wait - or (if possible) should have negotiated a salary that is in keeping with the current financial situation in the country.

36. AnonymousJuly 11,2022 at 9:39PM UTC

    Marie - I think your answer hit the bulls eye directly. Overall, employers can offer (or not) whatever they choose. Employee benefits are generally discriminatory. However, not based on ethnicity, gender, and etc. It is normally based on title, what the employee can offer, and even age. Eg: 21 yrs to enter a Plan and 1 yr of service. I posted earlier about lunch/dinner benefits

37. AnonymousJuly 9,2022 at 7:16PM UTC

    See, this is sort of my I left my previous position.

    I had been there for over twelve years. We were purchased by a nation wide corporation, which normally would pay very competitive wages. New hires were being brought on at a significantly higher wage rate than those of us whom had been there long term.

    I had spoken to my direct supervisor and manager about the wage discrepancy, especially since they used the model I developed to train these new employees and was the go to person to fix things when they were broken, citing these are reason why my wage should at the very least be brought up to the new hire wage.

    In the grand scheme of wages, it wasn't a large amount - it really was only about a $4 a hour difference, but it was the principal of the whole matter. I had always gotten stellar yearly reviews and was always willing to take on and learn extra duties as needed because the company had a bad habit of not always rehiring more people in certain departments as needed for replacement in a timely manner.

    I was told that wasn't cooperate policy to raise older employees salaries to match the new hire amounts, that I would have to be happy with the 3% raise I was normally granted each year when yearly review time came around (which the 3% was the hire end of what they offered for raises).

    My supervisor, on the side, said if I wanted the competitive rate, that I should quit and then reapply in six months, so that I could be rehired at the new rate. That meant I would lose my seniority, vacation accrued time and whatnot, just to get to the same wage rate as new hires.

    It was frustrating; and at that point, I figured it really wasn't worth it. If they truly weren't going to value me, then I was done.

    So I left. I'm now with a company that tries it's best to ensure that the loyal, older employees are equitability paid as well as the new employees based on the cost of living... and well, I get to be in a position where I actively help people instead of just typing in data into a computer.

38. AnonymousJuly 10,2022 at 11:37PM UTC

    Glad this worked out for you in the end.

    To add, $4. per hour would be a HUGE increase in my position! Wow!

39. AnonymousJuly 11,2022 at 4:21PM UTC

    That would be about a 20% increase for me!