Why do companies Pay Employees 'Lesser' than their Market Value?

“It is the Sweat of the Servants that make their Squire look Smart.” - Amit Kalantri

Hello,

I might not accept this statement, OR to revise it to Why the employee's accept to work with less than their market value? if this is the available then this is the market value or we are afraid to change.

I believe wages depends on the demand and availability and the need.

Best Regards 

Thanks,there are several factors that could lead to a company paying lesser to staff than their market value and one of them is the availability of cheap labor,when an economy of a country is driven by availability of cheap labor remuneration of professionals could become less due to the devaluation by this kind of availability.

Its the matter of demand and supply. If companies find significant amount of candidates against their openings then they find the opportunity to offer them perks on their terms. In such circumstances, candidates loose their bargaining power. Other hand smart HR managers play their role to take the advantages, it helps them (HR) to prove their existence too.

It is matter of abusing the current situation of the market and the desperate need from the employees for getting a job by any means for experience purposes. 

Some management pay less as they fail to understand the hidden cost of employee turnover, recruitment, training and productivity loss during vacancy.  

SUPPLY VS DEMAND

The higher the supply the lesser the demand the lower will be the value.

The scarcity law applies here:

scarce resources are very expensive, so if someone wants his/her real market value then he/she should possess needed competences not available for others. 

Because there are many unemployed people waiting outside to work less than the package given to you. 

Our company doesn't do this............................

That company is having a competitive HR team.

Thank you for the invitation and agree with Professor Abdul Rahman