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Home --- Topics --- February 2023 5th issue: Under labor shortage, non-regular new workers get higher wages than veterans?

February 2023 5th issue: Under labor shortage, non-regular new workers get higher wages than veterans?

Under the labor shortage, it is difficult to attract people with low wages. If the labor shortage continues, wages for recruiting will gradually rise due to the relationship between supply and demand. On the other hand, however, the wages of non-regular workers who have been working for many years and are not members of unions tend to be kept low. Wages may not rise even more if the person is a quiet person who does not complain. Depending on the company, it seems that some companies pay higher wages for newcomers than for veterans due to labor shortages.

February 2023 5th issue: Under labor shortage, non-regular new workers get higher wages than veterans?

Paying rookies higher than veterans is not in itself illegal. Employment contracts are concluded between employers, such as companies, and individual workers. As long as employers comply with labor laws and do not engage in illegal activities, it is possible for a company to pay new hires higher than veterans.
However, veterans usually contribute more to the company than newcomers. Veterans are used to their jobs. The new employee has just entered and does not know how to work. A newcomer needs to be taught by a veteran one by one, which bothers the veteran. Veterans' dissatisfaction will increase if they find out that the wages of such new recruits who are not yet useful and are troublesome are higher.
What is scary in human relationships is resentment, dissatisfaction, and envy over money. If there is a rumor among veterans that newcomers are paid higher wages than veterans, the atmosphere in the company will suddenly deteriorate. In some cases, veterans quit more and more, and the corporate organization may collapse.
If you want to improve the retention rate of veteran workers, you should pay attention to workers' dissatisfaction with personnel evaluations and wage systems and work to eliminate the sense of unfairness.
Higher wages for newcomers than veterans may not occur in companies with strong wage systems, where workers are unionized, or with good reputations both internally and externally. Rather, it seems to be a phenomenon that tends to occur in companies with many non-regular workers, inadequate wage systems, workers who are not members of unions, and poor reputations both inside and outside the company.
It can be said that companies that pay new employees higher wages than veteran employees are insensitive to the increasing dissatisfaction of workers and the deterioration of the atmosphere in the company. A company whose management is insensitive to internal dissatisfaction and deterioration of the atmosphere is likely to experience an internal collapse.

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