Wage Comparability Studies Are Key to Supporting Staff Recruitment and Retention

The labor market across the United States is holding steady, while rising gas and utility prices continue to push up the cost of food and housing. How is your organization responding? Are your employees satisfied with their current pay? If you have high turnover or unfilled vacancies, these are signs that your wages may not be competitive enough.

In organizations both big and small, wages and benefits are one of the driving factors in retention. Employees want to know how much they are worth, if they are being fairly compensated, and if they could earn more someplace else.

Many estimates show that it costs anywhere from 50% to 200% of an employee’s salary to replace that person, depending on the position. While HR does the work to find a qualified recruit and onboard them, your organization is losing productivity and may be unable to reach its strategic goals for the year.

One way to ensure your employees are well compensated is to conduct a wage comparability study. This powerful tool can reveal where your organization stands in the local marketplace, and if increases in wages are warranted in order to stay ahead of the competition. Meeting or leading the market in wages and benefits - instead of lagging - will allow you to retain your best and brightest employees, while also attracting new talent.

Compensation matters for everyone, and especially for individuals at lower earning positions, who may not be making a living wage. In the US, a Living Wage is the minimum hourly rate a full-time worker needs to cover basic costs such as food, housing, healthcare, taxes, and transportation without outside aid. In 2026, the living wage in most states is around $25 an hour – or $52,000 annually for a single adult.

Even if your organization isn’t able to pay a living wage to all of its employees right now, having the right data at your fingertips will allow you to plan for future wage increases, forecast personnel budgets, and create a communication plan that tells your employees how much you value them.

With an updated wage study, your organization can use local data to ensure pay equity across all job classes, setting the minimum, midpoint, and maximum pay in accordance with local rates. In addition, a well-designed salary scale will capture these pay rates for everyone in your organization and communicate a path to higher wages. That may be by increasing education and expertise to move up a rung on the corporate ladder, or by staying with your company for another year to receive a merit increase. The salary scale is essential as not just a planning and budgeting tool, but a communication tool that builds trust with employees.

We encourage you to explore Foundations for Families’ Consulting Services. If your program needs assistance with a wage comparability study or developing a salary scale, please be in touch. Our team of consultants will work with your program to determine a process, timeline, and approach that is the best fit for your needs.

 Thank you.

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