2024 PAY INCREASES – WHAT’S THE LATEST INFORMATION?
As a tight labor market and inflationary pressures linger, U.S. employers are looking to continue competitive pay hikes for employees in 2024—although the aggressiveness of raises may be starting to cool, new data finds.
Although U.S. employers had projected boosting salaries an average of 4.6 percent in 2023 (up from 4.2 percent in 2022), a recent survey of more than 2,000 organizations indicates organizations are budgeting an average increase of 4 percent in 2024. That number is down from the actual increase of 4.4 percent in 2023 and the 4.2 percent increase in 2022, but the projected 2024 figures remain higher than the 3.1 percent salary increase budget in 2021 as well as other increases in pre-pandemic years.
Some Contributing Factors
Several factors continue in 2024 to affect employers’ evolving compensation strategies. The most common concerns among those finalizing 2024 pay budgets are:
- 61% – Concerns over a tighter labor market impacted by worker shortages
- 60% – Inflationary pressures
- 24% – Concerns regarding employee expectations
- 23% – Anticipated recession or weaker financial results
- 20% – Cost Management
New Hire Starting Pay
Also of note is that recent federal government reporting of job creation is well above expectations and relatively low unemployment is putting pressure on organizations to raise starting salaries to attract new employees.
Funding Pay Increases
To fund the higher pay, organizations are limiting benefits and perks to those most valued by employees, raising the prices of their products or services and resorting to organizational restructures and reduced staff headcounts.
Next Steps – We Can Help
As inflation continues to rise and the threat of an economic downturn looms, organizations should prioritize their actions based on the needs of both the employer and the employees while paying close attention to dynamic and changing market data.
Let’s talk about how we can assist you in addressing these issues. For the month of January, we are offering a 30-minute consultation to assist you in evaluating your organization’s compensation strategy for 2024 and beyond.
To set this consultation please complete our 2024 Compensation Assessment and we will get back to you promptly to schedule your consultation. The purpose of the assessment is for us to evaluate your company’s current compensation plan with a particular focus on the challenges employers are facing in 2024. Our professional compensation consultants will review and make observations and recommendations for your company to consider.
All information is considered confidential and will only be used for our free, no-obligation 20-minute phone consultation.
Once the information is received, we will contact you to schedule your consultation with our compensation specialists.
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