Yes, this conflict exists. On the other hand, if a large gap appears between an employees' salaries and their market rate, that increases the company's turnover.
Turnover is very expensive, somewhere between 6 months and 2 years of salary per employee that turns over. So an employer should proactively offer raises to keep their employees' salaries near market rate and help avoid turnover costs.
It's short-sighted to keep salaries low. That's not to say companies don't do short-sighted things though...
Turnover is very expensive, somewhere between 6 months and 2 years of salary per employee that turns over. So an employer should proactively offer raises to keep their employees' salaries near market rate and help avoid turnover costs.
It's short-sighted to keep salaries low. That's not to say companies don't do short-sighted things though...