Following reports that a Nikkei MJ survey found more than 70% of existing employees would consider changing jobs if new graduate hires were paid more than they were, a note article argues that although more companies are raising starting salaries, this will not directly strengthen their competitiveness for talent.
Nikkei MJ reported survey results showing that existing employees said they would consider changing jobs if newly hired graduates were paid more than they were. It also pointed out that although more companies are raising starting salaries, such pay inversions could create a sense of unfairness and increase employees’ intentions to leave.
Some argue that raising starting salaries often amounts to a short-term response to a candidate-driven labor market. While it may fuel price competition in the recruitment market, it does not constitute a talent strategy in itself.
Companies should instead determine what talent and capabilities they will need to generate future competitiveness, and design how to develop, deploy and reward them. Raising starting salaries alone will not create talent competitiveness unless it is accompanied by attractive assignments, development opportunities, compelling work and salary growth after employees reach their 30s.
The article presents this perspective and maintains that the operation of base-pay increases and wage-setting practices cannot substitute for a new talent strategy.