As 2023 winds down, it’s time for many to begin planning salary budgets and other considerations for 2024.
Economic uncertainty and labor shortages that have plagued the last few years have left employers scrambling to stay competitive to keep top talent while boosting the company’s financial health.
These issues leave many to wonder: How will budgets and
compensation be impacted for 2024?
Here are three early
compensation trends for 2024 salary budgets to help you get a head start.
Raises & salary budgets
With economic turbulence plaguing the first half of 2023, it may come as a surprise that more than three-fourths of U.S. companies plan to increase salaries the same as or more than this year, a recent salary budget survey
by Payscale found.
Additionally, pay is expected to rise 3.8%, compared to 4% in 2023.
This echoes the findings of an earlier WTW survey, which found that organizations are budgeting an average increase of 4% in 2024. That’s down from 2023, which saw an actual increase of 4.4%, but higher than increases in salary budgets from previous years.
As the labor market cools, however, Payscale’s survey found that 22% of companies are planning to cut their salary increase budget next year, significantly higher than 9% of companies in 2023.
What's driving it
For those who said their 2024 salary increase budget is expected to be higher than 2023, respondents cited:
- Increased competition for labor or labor supply shortage (65%)