Your Comp Bands Are Out of Date
- Jul 20
- 4 min read
HR ADVICE - Lauren Deats - For Business
Let me describe a meeting you have probably sat in.
Somebody good just quit. Not fired, not managed out. Good. And in the debrief somebody says, "we just can't compete on comp right now," and everybody nods, and it goes in the notes as a market problem, and the meeting moves on.
Here's what I'd bet money on if I could see your numbers: it wasn't a market problem. You didn't lose that person to a competitor's offer.
You lost them to your own.
What actually changed
Wage growth cooled to 3.5 percent over the past year. From the middle of 2025 through February, it was running between 3.7 and 4.0 percent.
For about three years before that, you got beaten up. You know you did. You were losing candidates in final rounds to people who came in eight thousand over your band, and you started stretching, because the alternative was leaving the req open another quarter.
So you stretched. Everybody stretched. And that stretching didn't go into your bands. It went into your offers.
That's the whole problem in one sentence. The band on paper is not the number you've actually been paying.
And now the pressure's easing, and almost nobody has gone back to look.
The math nobody runs
Here's the fifteen minute version. Do it this week.
Pull your last five offers. Not the bands. The actual accepted numbers. Now put each one where it landed inside the posted band for that role.
If they're all clustered in the top quartile, or above it, your band is fiction. Your real floor is higher than the document says, and every hiring manager in your company already knows it, which is why they keep coming to you for exceptions.
Now check those hires against your incumbents. Same role. Same level. What's the spread?
This is where it gets ugly. That's salary compression, and it's how you lose somebody good six months after you hire somebody good.
Because here's how it actually plays out, and it's never dramatic. Your new hire mentions their number at a happy hour. Or the range on the reposted req is visible and somebody does arithmetic. And your best person, the one who's been carrying that team for four years, learns that loyalty cost them nine thousand dollars.
They don't quit that day. They quit in about eleven weeks, and they'll tell you it's "a great opportunity," and you'll write down "market problem," and the whole cycle starts again.
Why this is worse right now, specifically
Two things are true at the same time and they point the same direction.
The labor force is shrinking. Unemployment ticked down to 4.2 percent in June, but not because hiring surged. It's down because people stopped looking. They left. And when people stop entering the pool, the person already sitting at the desk gets harder to replace, not easier.
Hiring concentrated. Health care, social assistance, professional and business services kept growing while leisure and hospitality shed 61,000. If you're in a growing sector, your good people have somewhere to go. If you're not, you have a different problem, but it's still not a comp problem.
Put those together and you get the thing most comp strategy gets backwards:
The people you already have are now harder to replace than the people you're trying to recruit.
Most comp budgets are still shaped like it's 2023. Loaded toward acquisition. Signing bonuses, stretch offers, a recruiter contingency line. And retention is a cost-of-living bump applied in a spreadsheet in November.
That's backwards now. Retention is cheaper than a req. It was always cheaper than a req, but now it's cheaper and the replacement is harder to find.
What to actually do
Re-band from actuals, not aspirations. Your bands should describe what you pay, not what you wish you paid. A band nobody honors isn't governance, it's paperwork.
Fix compression before you post the next req. If you post a range that exposes your incumbents, you've just started a clock and you don't get to choose when it goes off.
Move money from acquisition to retention. Not all of it. Some of it. If you're spending on stretch offers and contingency fees while your four-year people are on a 3 percent annual, you are paying a premium to replace the people you're underpaying.
Stop calling it a market problem. The market is one input. Your band is a decision. Those are different, and only one of them is yours.
The uncomfortable part
I spent nearly twelve years on the hiring side before I started consulting, and I want to be straight with you about something, because I've been in the meeting I described at the top and I've been the one nodding.
"We can't compete on comp" is a comfortable sentence. It's comfortable because it makes the problem external, and external problems don't require anybody in the room to have made a mistake.
But the number was a decision. Somebody made it. Usually with the best information they had at the time, in a market that was actively punishing them, and it was probably even the right call then.
It just isn't 2023 anymore. And the bands haven't heard.
Want somebody outside your org to run the numbers? Start with a consult. I've sat on both sides of this desk, and comp reviews are exactly the kind of thing that's easier when the person doing it doesn't report to anybody in the meeting.
Related: The June 2026 jobs report, decoded covers what the underlying data actually says.
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