US pay raises to dip, but remain high in 2024, WTW says

Dive Brief:

  • U.S. employers plan to increase salaries 4% in 2024, down slightly from an average increase of 4.4% in 2023, according to the results of a Salary Budget Planning Survey that advisory firm WTW released Dec. 7. Raises still remain above historical averages of 3.1% in 2021 and years prior. 
  • Of the more than 33,000 employers surveyed, more than half attributed the increases to inflationary pressures and worries about a competitive labor market, per the survey. 
  • “We are seeing healthy salary increases forecasted for 2024,” Hatti Johansson, research director of reward, data and intelligence at WTW, said in a statement. “Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor.”

Dive Insight:

Employers are still worried about the job market, but fewer say they’re struggling with attraction and retention, down to 48% from 60% in 2022, according to the survey.

Johansson, however, warned employers against “basing decisions that will have long-term implications on their organization on temporary economic conditions,” noting that it’s difficult to reduce pay if the economy worsens. 

Organizations also are focusing on total rewards to attract and retain workers, including greater flexibility, a greater emphasis on diversity, equity and inclusion, and enhancing the employee experience, per the survey. 

More than half of workers say they are content or happy with their salary, yet nearly 3 in 4 say they could be lured to another job, according to a recent survey by BambooHR. On average, workers say they would need 13.3% higher compensation to leave.