Help Your Managers Prepare for Conversations About Pay

NOVEMBER 3, 2026

Hiring and turnover have slowed, but pay concerns haven’t. With the cost of living rising sharply, employers should be ready to discuss employees’ questions about wages.

The financial incentive to change employers has largely faded since the Great Resignation. In September 2026, base pay growth for employees who changed jobs was around 4.8%, down from 12.9% in May 2022. For employees who stayed with their employer, year-over-year base pay growth declined from 5% to 3% over the same period.¹

Pay and benefits remain among the most common reasons employees consider changing jobs. Yet 43% of workers say they are staying in their current positions because leaving would be too difficult or costly.²

The rising cost of living also continues to influence employee expectations about pay. With employers budgeting around 3.5% on average for total salary increases, employees may feel their wages are not keeping up with expenses, even when their compensation aligns with market rates.³

When employee expectations exceed what an organization can afford, the employer should be prepared to clearly communicate pay decisions and explain the rationale behind them.

Get Ready for Harder Pay Conversations

Employees have more ways than ever to see what people in similar roles earn, especially as transparency legislation expands. State pay transparency laws already cover more than 35% of the U.S. workforce, and additional states continue to expand employer disclosure requirements.⁴ Even with greater transparency, compensation remains part art and part science, and what’s “fair” is not the same as “equal.”

Employees often want reassurance that their pay reflects the value they provide. Establishing a compensation philosophy can give your managers clear reasoning and set them up for more successful conversations. Periodic benchmarking with verified survey data can help validate your decisions and keep compensation aligned with the market. Using that data instead of AI-generated estimates or self-reported job-board figures can also strengthen employee confidence.

Help Managers Lead Successful Pay Discussions

How employees perceive their base pay and salary range can strongly influence how satisfied they feel with their compensation and employer. Managers should prepare now for the most common questions:

• Why am I not getting a raise?
• Why am I at the low end of my pay range?
• Why is my pay range lower than my colleague’s?
• Can I see what other employees are making?

Managers should acknowledge employees’ concerns, remain focused on the facts, and avoid promises about future increases. They don’t need to defend or justify every detail. Instead, managers should concentrate on the organization’s compensation philosophy and pay structure, including the values that guide wage decisions. It is also important to know when to escalate issues to HR.

Keep the conversation constructive with this discussion framework:

1. Acknowledge the concern and validate the question.
2. Explain that pay range information on job sites is often self-reported and may not be independently verified.
3. Walk through how the organization determines pay, and how its compensation philosophy and verified market data help guide decisions.
4. Offer to review where the employee’s pay falls within the range, as well as discuss opportunities for development.
5. Close on a positive note and invite future questions or conversation about pay and job progression.

This framework helps managers keep pay conversations productive and explain how the organization uses data to make decisions. It also gives employees a path forward for discussing pay, performance, and career growth.