Employers Target 3.8% Pay Increase in 2024

According to recent surveys conducted by Payscale and WTW, many employers are budgeting for a 3.8% pay increase in 2024, a slight decrease from the average 4% bump seen this year.

The eighth annual salary survey by Payscale focused on 1,757 organizations in the US, finding that the percentage of organizations planning to lower their salary increases in 2024 grew from 9% last year to 22%. Similarly, WTW found that the average employer is budgeting for a 3.8% salary increase in 2024, down from the 4.4% increase in 2023 and 4.2% in 2022. The percentage is still higher than the 3.1% salary increase seen in 2021. 

These findings suggest that employers might be showing less concern about attraction and retention compared to previous years. However, it is crucial for employers to monitor wage growth trends and utilize up-to-date market data to remain competitive and ensure fair compensation, given that labor market dynamics still favor employees and are marked by skill shortages in some sectors.

The rising cost of living and looming recession leads many professionals to expect pay increments that match or surpass inflation. 

“As inflation and a possible recession impact economies globally, 71% of employees expect their employers to consider the rising cost of living when evaluating pay rises or bonuses over the next 12 months,” says Alejandro Paz, Country Manager, Robert Walters. 

A recent survey by ADP Research Institute reveals that a significant majority of workers expect higher pay and are willing to leave their jobs if their salary expectations are not met. “If you’re not offering competitive pay and benefits and a work culture that promotes employee well-being and professional development, you’re at a big disadvantage,” says Dawn Fay, Operational president, Robert Half.

In Mexico, 34% of employees have not received a salary increase in the past two years, pointing to potential concerns regarding the financial well-being of the workforce. As a result, 98% of Mexicans are open to exploring new opportunities in the job market.