I had an interesting discussion with a client about why they couldn’t be more competitive with their compensation when recruiting external candidates. His reply when I asked why they couldn’t go beyond the stated range given what we knew about the market was “we have internal equities with some very talented team members who have been with us for a long time.” Before I could respond he followed with “I know that means we should consider adjusting our pay ranges and perhaps even adjust what we are paying our people now, but that is very difficult to do.”
The employment market in virtually all disciplines is as active as it has been in more than a decade. Your “talented team members” are aware of their market value and are receiving calls from headhunters on a regular basis. As you plan for the annual compensation review cycle it is less difficult to adjust the ranges to be more competitive than it is to adjust those ranges while trying to replace key team members.