Pay compression between new hires and the junior staff training them has reached a level that is changing behavior, not just morale. New research from IRIS Software Group found 71% of UK employees with two to five years’ experience say they struggle to feel motivated training new starters who earn almost the same salary. The average gap between these two groups now sits at just £650 a year. Among juniors who found out what colleagues earned, 69% said they felt undervalued, frustrated, or disappointed, a third asked for a raise, and 16% had already accepted another job.
This matters because the people absorbing the squeeze are exactly the workers a company needs onboarding the next intake and holding institutional knowledge while more senior staff move on. IRIS surveyed 511 HR leaders alongside the 500 employees, and nearly half expect salary bands to narrow further over the next two years even as they acknowledge the risk. Eighty-four percent of HR leaders said they were concerned about losing valuable staff over the issue. Only one in five said they planned targeted salary adjustments to fix it.
The original insight here is the gap between HR’s stated concern and its budget response. A quarter of the HR leaders IRIS surveyed admitted their own systems cannot compare pay against skills and responsibilities, which means many organizations are not just underpaying compression, they cannot see it forming until it shows up as a resignation. “Better visibility gives businesses the chance to intervene earlier, whether that means targeted pay adjustments, clearer progression, or simply having a more informed conversation with employees about what their experience is worth,” said Stephanie Coward, IRIS’s managing director for human capital management. That visibility problem, not the £650 gap itself, is the compounding risk, especially as career ladders keep flattening into a diamond shape that already squeezes the same mid-level cohort, and as senior job seekers accept downleveled roles that push further pay compression down the ladder.
Source: IRIS Software Group
