Salary negotiation is one of the most common topics professionals seek content on, but it’s still hard to get a macro understanding of who’s negotiating and who isn’t. Professionals in the Glassdoor community are weighing in on if they negotiated their salary for their most recent job and the data may surprise you. More than 6,500 professionals weighed in and more than half of them (54%) did not negotiate their most recent salary. 

How does that break down by industry? Salary negotiation is most common among advertising, marketing, and tech professionals—with 67%, 62%, and 56% of them negotiating their most recent salary, respectively. Which industries had the least negotiation? Just 22% of graduate students and 37% of accounting and law professionals negotiated their most recent salary. 

What about age? 56% of professionals between the ages of 36-40 negotiated their most recent salary, while 55% of those aged 41-44 and 50% of those aged between 30-35 did the same. Younger professionals are less likely to negotiate pay, with just 27% of those aged 21-25 and 44% of those between 26-29 negotiating their most recent salary. 

And gender? Men and women are equally as likely to negotiate, with 46% of men and women having negotiated their most recent salary.  

Methodology: This poll ran from August 9, 2023 through August 14, 2023 and was answered by 6,673 professionals on Fishbowl by Glassdoor. Respondents could answer with either “Yes” or “No” to the question, “For your most recent job, did you negotiate your salary?” 

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Source: Glassdoor

https://www.glassdoor.com/research/conversation-starter-more-than-half-of-professionals-did-not-negotiate-salary-for-most-recent-job

September 25, 2023 09:28 AM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Today, Mercer, a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being, and a business of Marsh McLennan (NYSE: MMC), released the results of its August 2023 Mercer QuickPulse™ US Compensation Planning Survey. According to the survey, employers in the US plan to raise their compensation budgets by 3.5% for merit increases for 2024 and 3.9% for their total salary increase budgets for non-unionized employees. This compares to actual merit increases of 3.8% and 4.1% for total salary increase budgets for non-unionized employees in 2023.i

“While preliminary compensation budgets for 2024 are showing a slight decline, they remain well above pre-pandemic levels, reflecting the ongoing tightness of the labor market and low levels of unemployment. However, if the labor market continues to stabilize and inflation cools further as we move towards the end of the year, compensation pressures are likely to continue to decline. This could prompt further reductions in 2024 compensation increase budgets, as employers adjust their strategies to reflect the changing economic landscape,” said Lauren Mason, Senior Principal, Career, Mercer.

Across industries, Healthcare Services are projecting 2024 budgets that lag other industries, with merit budgets of 3.1% and total increase budgets of 3.4%, as the industry continues to recover from the financial impact of the pandemic. Recent layoffs and financial strain on the high-tech industry also appear to be impacting merit budgets, with projected increases of 3.3%, a reversal of historical trends where high-tech typically led increases across industries. Several industries, including Energy and Consumer Goods, are planning merit budgets above the national average, projecting an increase of 3.7%.

The survey also found that employers are planning to promote less (8.7% of the employee population) and therefore will allocate less of their budget (1.1%) to promotional increases in 2024. In 2023, employers reported that they promoted 10.3% of their population, allocating 1.2% of their salary budget to do so.

Looking back at actual compensation increases over the last year, employer base salary levels increased 5.6%ii on average, despite 2023 merit increase budgets of 3.8%. This is a result of off-cycle pay increases which 59% of employers reported providing in 2023. The top reasons cited for off-cycle increases were to address retention concerns, counteroffers, market adjustments, and internal equity.

Ms. Mason continued, “As employers plan for 2024, it is crucial that they move away from the reactive approach of the past few years and adopt a more strategic approach. This will enable employers to focus their compensation investments on the most critical attraction and retention segments of their workforce, while also ensuring that pay increases are distributed fairly and equitably.”

Note to editors:

Total increase budgets include other base pay increases such as promotional pay increases and cost of living adjustments, in addition to merit increases.

About Mercer’s US Compensation Planning Survey

The August 2023 Mercer QuickPulse™ US Compensation Planning Survey includes data from more than 900 organizations in the US, from small employee bases (less than 500 employees) to very large employee bases (over 20,000 employees) across 15 industries. This study was fielded between July 31st - August 11th. You can review more of the survey findings here.

About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with more than 85,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.

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Source: Mercer

https://www.businesswire.com/news/home/20230925303517/en/US-employers-plan-more-modest-compensation-increases-in-2024

By Dawn Kawamoto - September 7, 2023

U.S. employers made bold moves this year on compensation, pushing salary increase budgets to a 20-year high, despite fears of resurgent inflation and recession, according to a WorldatWork survey released this week. But the momentum is expected to slow by next year.

Increases to salary budgets rose to 4.4% on average this year, slightly higher than earlier projections of 4.1%, and also marking the highest level since the 2001 peak of 4.5%, according to the survey of more than 2,000 U.S. employers. Last year, salary increase budgets stood at 4.1%.

A tight labor market and cautious economic optimism contributed to the increase, Liz Supinski, director of research and insights at WorldatWork, tells HRE.

“While there are still many concerns about recession, there is significant speculation among economists that we might achieve a soft landing,” Supinski says. “A number of economists are now speculating that we might see a novel kind of recession that is not accompanied by the large-scale job loss that we’ve seen in past recessions.”

But despite higher-than-expected salary increase budgets this year and more optimistic outlooks on the economy, budgets are expected to slightly drop next year, to 4.1%, according to the survey.

Supinski characterizes the shift as a migration back to what was seen as “normal”: 3%-3.5% salary increases that largely prevailed for most of the last 20 years, until 2022.

The forecasted 2024 decline, she adds, may also be the result of an easing of the intensity of the labor market pressures as the impact of economic policy decisions filters out.

This year, salary hikes were more impacted by labor market pressures than recessionary fears, though the increases were still moderate, she notes.

HR can address those labor market pressures by looking beyond base salaries.

“Variable pay continues to play an important role in compensation and allows organizations greater flexibility in responding to business and economic conditions than do base salary increases,” Supinski says. “So, [this] will continue to be a focus for many employers.”

Notable salary increase budgets around the world

WorldatWork’s report found higher-than-anticipated salary boosts around the world this year. In the United Kingdom, for instance, the average salary increase rose 4.5% compared with a projected 3.9%, according to the survey.

One country posting consistent growth in salary increase budgets was Mexico. In 2021, the average rose to 4.7%, then 5.7% the following year and last year jumped to 6.3%.

India, meanwhile, garnered the largest increase of the 18 countries where employers were surveyed. The average salary increase in India was a hefty 9.8% this year, bringing it closer to the pre-pandemic level of 9.9%. Last year, however, employers there doled out salary increases that averaged 10.1%.

Meanwhile, in the U.S., all states are expected to experience a decline in 2024, which is anticipated to range from a 0.1% drop in salary increase budgets in Arizona and California to a 0.4% fall in Alaska and North Dakota.

Layoffs may be even lower in 2024

In addition to salaries rising across the globe this year, employers are scaling back on layoffs, according to the WorldatWork survey.

This year, 70% of employers worldwide reported no layoffs and a whopping 91% expect the same for 2024, states WorldatWork in its report.

And in the U.S., 61% of employers report no layoffs this year and 87% have similar expectations for next year.

Despite that, Supinski cautions HR not to read too much into the numbers.

“It was a broad, exploratory question, intended mostly as a screener to identify what portion of organizations were repurposing savings from layoffs for salary budget increases,” she notes.

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Source: Human Resource Executive

https://hrexecutive.com/u-s-salary-increase-budgets-hit-20-year-high/?oly_enc_id=1127F6638590B7V  

Newly Expanded Participant Pulse Report Also Finds Health Savings Account Balances Up Nearly 12% This Year

August 8, 2023 at 8:00 AM Eastern

CHARLOTTE, NC – Today, Bank of America released its Q2 2023 Participant Pulse (PDF)(MAP5773977), which found average 401(k) balances increased by $7,250 (9.6%) since the end of 2022.1  The report also found that a growing number of 401(k) participants are initiating withdrawals from their plans. The number of participants taking hardship distributions increased 36% year-over-year,1 following increases in Q12 this year. In addition, the percent of participants borrowing from their workplace plan in Q2 also increased (2.5%, up from 1.9% in Q1).1

The Pulse monitors plan participants’ behavior in Bank of America recordkeeping clients’ employee benefits programs, which is comprised of more than 4 million participants as of June 30, 2023.

“The data from our report tells two stories – one of balance growth, optimism from younger employees and maintaining contributions, contrasted with a trend of increased plan withdrawals,” said Lorna Sabbia, Head of Retirement and Personal Wealth Solutions at Bank of America. “This year, more employees are understandably prioritizing short-term expenses over long-term saving. However, it’s critical that employees continue to invest in life’s biggest expense – retirement.”

Amid rising 401(k) plan withdrawals, employee contributions remained steady, with the average rate remaining at 6.5% throughout the first half of 2023.1 Meanwhile, more participants increased their rate than decreased their rate (10.2% vs. 2.2%) in Q2,1 which was led by Gen Z3 and Millennial3 employees (19.3% vs. 2.6% and 11% vs. 2.6%, respectively).

Health Saving Account and Financial Wellness Trends

To provide a more holistic look at confidence around financial preparedness, Bank of America has expanded the quarterly Participant Pulse report series to examine engagement across Health Saving Accounts (HSA)4 and overall feelings of financial wellness, in addition to 401(k) trends. Key HSA and financial wellness findings include:

• HSA account balances increased by 11.9% over year-end 2022. Average HSA account balances increased from $3,931 to $4,397 in the first six months of 2023.4
• Many HSA account holders continue to save their contributions for future expenses. Nearly 4 in 10 account holders contributed more than they withdrew in Q2, consistent with year-end 2022.4
• Baby Boomers invested their HSAs at higher rates than other generations. On average, only 12% of account holders invested their HSAs for future growth in Q2, with Baby Boomers3 leading at 15%. In addition, more men invested than women (18% vs. 11%).4
• Feelings of financial wellness declined slightly. Out of a possible 100 points, the average financial wellness score for employees was 56, down one point from 57 at year-end, with women trailing men (52 vs. 59).1

Read the full report and methodology (PDF) to learn more.

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Source: Bank of America

https://newsroom.bankofamerica.com/content/newsroom/press-releases/2023/08/bofa-report-finds-average-401-k--balances-up-nearly-10--in-2023-.html

U.S. companies across a range of industries seek to gain an edge in an unusually tight labor market by increasing pay.

Published Aug. 15, 2023 by Jim Tyson, Senior Reporter

Dive Brief:

• Roughly three out of every four CEOs (74%) plan to boost wages by at least 3% during the next year, with most top executives identifying wage growth as the sharpest spur to inflation during the coming 18 months, according to a quarterly survey by the Conference Board and Business Council.
• “Attracting qualified workers remained difficult for the majority of companies,” Conference Board Chief Economist Dana Peterson said in a statement.
• “The competition for talent is fierce,” she said, noting that two out of five CEOs “are maintaining the size of their workforce — a sign of labor hoarding in an extremely tight labor market.” The two-week survey of 127 CEOs concluded July 24.

Dive Insight:

U.S. companies for months have faced challenges hiring and retaining workers, with unemployment falling last month to 3.5% from 3.6% in June and available jobs far exceeding the number of workers seeking employment, according to the Labor Department.

Aiming to attract and retain workers, companies increased hourly wages after inflation by 0.3% last month in the fifth consecutive month of pay hikes. Yet demands for higher pay persist — inflation-adjusted hourly earnings have risen only 1.1% during the past 12 months amid the worst inflation in 40 years.

“There’s still a lot of pressure upwards” on wages, HireQuest CEO Richard Hermanns said during a second quarter earnings call on Thursday, noting “a constant shortage” of workers.

“I was flying through Minneapolis the other day, and you’ve got a restaurant in the middle of the airport closed until two o’clock because they didn’t have enough people,” Hermanns said. HireQuest provides temporary staff services.

CEOs at a broad range of industries — from financial institutions, to cinemas, to transportation firms — are using layoffs, technology and other streamlining to cope with rising labor costs, several top executives said during recent Q2 earnings calls.

UPS reduced compensation and benefits by $205 million during the second quarter by trimming management staff by 2,500 year-over-year, CFO Brian Newman said in an earnings call on Tuesday. The cuts helped blunt a 6.5% increase in average union wage rates during recent labor negotiations, he said.

“One thing that was very important for Teamsters leadership was to front-load some of the wage inflation,” UPS CEO Carol Tomé said. “We agreed to do that, so that does put a little pressure on the margin.”

“We’ll have a bit of pressure for the next year — June to August of next year — but then inflation is very manageable,” Tomé said.

TFI International, a transportation company, recently agreed to a 3% average annual salary increase for five years after cutting its year-over-year shipping costs by 15% compared with last year, CEO Alain Bédard said during a quarterly earnings call on Aug. 1.

ARKO, a convenience store operator, faced a 6.5% rise in personnel costs during Q2 compared with the same period last year, CFO Donald Bassell said during an earnings call on Tuesday.

“We, like others in the industry, have faced wage inflation,” Bassell said. “Our overtime has decreased a tremendous amount and that goes towards, I think, quality of life that we’re getting with people and also getting temp services.”

Still, “the biggest unknown is going to be labor,” he said.

Cinemark Holdings, an operator of cinemas, faced a 12% surge in global salaries and wages during the quarter, on a year-over-year basis, CFO Melissa Hayes Thomas said during an Aug. 4 earnings call. Yet such costs fell 1.6% as a proportion of revenues thanks to higher attendance and streamlining.

“We are still seeing some wage rate pressure,” she said, pointing to higher minimum wage requirements in some states rather than a “labor market dynamic.”

The increase in pay and retirement savings at many companies has buoyed performance at Principal Financial Group, a provider of insurance and manager of retirement assets.

“We are uniquely positioned, that when inflation plays through, especially when it plays through on salary levels, we do get benefits,” Principal CFO Deanna Strable said during a July 28 earnings call. “That plays through from a revenue perspective.”

Yet Principal is also buffeted by labor market headwinds. “We have had to increase salaries because of that inflationary pressure and war for talent,” Strable said.

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Source: HR Dive

https://www.hrdive.com/news/ceos-plan-raise-wages-3-percent-conference-board-inflation-labor-pay/690889/

The employer allegedly calculated the rate of overtime pay incorrectly for nonexempt workers, thereby shorting staff of wages, per court documents.

Published Aug. 10, 2023 by Caroline Colvin, Reporter

A federal judge on Tuesday signed off on a $8,369,000 settlement agreement between Google LLC and 6,517 workers, resolving an overtime compensation lawsuit.

The class action suit, originally filed in 2021, concerned violations of the Fair Labor Standards Act, along with California state law. The two groups in the suit are the California class and the FLSA collective, including workers in and out of the state.

The California class includes all non-exempt Google employees who worked in the state from December 22, 2017, through June 5, 2022, and were awarded restricted stock units and/or received a sign-on bonus at that time. The FLSA collective includes Google employees who worked at the tech company from December 22, 2018, through June 5, 2022, and were also awarded restricted stock units and/or received a sign-on bonus.

Workers alleged that the company incorrectly calculated the regular rate of pay by excluding commission and stock unit payments, which led to an incorrect calculation of the overtime pay rate. 

Attorneys at Nichols Kaster, one of two firms representing plaintiffs in the cases, said this miscalculation “gave Google the benefit” of paying hourly employees at lower rates than required. 

The U.S. District Court for the Northern District of California’s decision comes after a March 2023 preliminary approval for the nearly $8.4 million settlement.

This isn’t the first overtime class action brought against Google in recent memory. In 2018, the tech company and a staffing agency agreed to shell out about $5.5 million to settle claims it failed to properly pay recruiters and sourcing professionals. At the time, Michael Palmer, a partner at the law firm representing the Google recruiter who filed the 2016 case, said Google restricted the hours recruiters could report, “knowing that they must work overtime to meet performance goals.”

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Source: HR Dive

https://www.hrdive.com/news/google-overtime-class-action-8-million/690565/

“It’s never too early or too late to bridge the gap,” an attorney said regarding the report.

Published Aug. 8, 2023 by Caroline Colvin

Dive Brief:

• Not only do the majority of Americans not have a will, but most people would be more willing to create one if their employer aided the process, LegalShield’s Aug. 8 report on estate planning revealed. 
• A medical diagnosis or health concern would prompt about half of Americans to make a will; 42% would make a will if they reached an increase in wealth. Retirement or “age milestones,” marriage, death of a loved one, a house purchase and the birth of a child were the next motivators, more than employer-offered benefits.
• Still, nearly 60% said that if their employer offered legal services to help them create a will, they would. 

Dive Insight:

The report also revealed that a gap in understanding exists among workers regarding what benefits packages entail. While 42% said their company doesn’t provide estate planning benefits and 8% said it does, the rest of U.S. workers surveyed could not confirm whether their employer offered voluntary estate planning benefits. 

Since the pandemic, conversations about benefits have expanded. Conversations about mental health and wellbeing have come to the fore, along with long COVID considerations and benefits as both attraction and retention strategy.

While events such as illness diagnoses or life transitions were cited as the catalyst for creating a will, as Ashley Higginbotham, attorney with Deming, Parker, Hoffman, Campbell & Daly LLC said in the report’s announcement: “It’s never too early or too late to bridge the gap.”

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Source: HR Dive

https://www.hrdive.com/news/worker-estate-planning-benefits/690300/

By Anthony Zaller on August 10, 2023

POSTED IN WAGE & HOUR LAW

California’s Department of Finance provided a letter to Governor Newsom as required under Labor Code section 1182.12 to reflect the adjustment in the state minimum wage each year.  The Department announced that California’s minimum wage will increase by 3.5% to $16.00 per hour for all employers as of January 1, 2024. This Friday’s five reviews how the increase impacts California’s employers:

1. White Collar Exemptions – Salary Requirement Tied to State Minimum Wage

California’s employment laws classify employees into two main categories: exempt employees and nonexempt employees. Federal and state laws exempt certain employees from wage and hour requirements. An exempt employee is an individual who is exempt from any overtime pay or minimum wage requirements. The “white collar” exemptions are: Professional, Executive and Administrative. To qualify as an exempt employee, the employer bears the burden to meet the requirements of a two-part test the employees must meet to be exempt: (1) the salary basis test and (2) the duties test. The salary basis test requires that the employee must be paid a salary that is at least two times the state minimum wage, which will increase as California’s minimum wage increases.

With the increase to the California minimum wage on January 1, 2024, the minimum annual salary to meet the white-collar exemption increases to $66,560 per year, and $5,546.67 per month (increasing from $64,480 per year in 2023).  For more information on exempt employee classifications, see our prior article here.

2. Computer Professional Exemption Salary Requirement Increases in 2024

Labor Code section 515.5 sets forth that certain computer software employees are exempt from overtime requirements under the Labor Code. One aspect to meet this exemption is a minimum salary.  For 2023, California’s Department of Industrial Relations adjusted the computer software employee’s minimum hourly rate of pay exemption from $50.00 to $53.80, the minimum monthly salary exemption from $8,679.16 to $9,338.78, and the minimum annual salary exemption from $104,149.81 to $112,065.20 effective January 1, 2023.  The DIR will be announcing the increase for computer professionals in October 2023. 

3. Local Minimum Wage Ordinances

There are over 35 local minimum wage ordinances throughout California.  Employers are required to comply with the higher of the state or local minimum wage that applies to them.  Many of the local minimum wage rates increase on July 1 of each year, but there still are some that have a January 1 increase date.  Employers must carefully review all applicable local minimum wage (and paid sick leave) requirements.

4. Industry Specific Minimum Wages

• Hotel Workers:

In addition to state and local minimum wage rate, some localities also have industry specific rates. The employers should always check their local ordinances that might apply to their workforce/industry. There are some cities that apply specific rates for hotel workers. For example, the City of Long Beach and the City of West Hollywood have adopted ordinances requiring a higher minimum wage for these workers.

• FAST Act – Fast Food Workers:

As we have written about on this blog, on September 5, 2022, California Governor Gavin Newsom signed into law AB 257, termed the Fast Food Accountability and Standards Recovery Act or FAST Recovery Act.  The law proposes to establish a Fast Food Sector Council to regulate California’s fast food restaurants and set the minimum wage rate, among other workplace regulations, for the fast food industry. However, the law has been challenged and a coalition, the Save Local Restaurants Coalition, submitted over one million signatures on December 5, 2022, in opposition to the FAST Act and now the bill will be on the November 2024 ballot as a referendum for California voters to decide the fate of the law.

5. Planning For Minimum Wage Increases

As employers start to prepare for 2024, some best practices for ensuring compliance with all minimum wage requirements include:

• Review all exempt employee classifications and specifically list which exemption they qualify for and ensure they are paid the statutorily required salary.
• Develop a chart listing all nonexempt employees by location and ensure compliance with the location where the employee is working.
• Audit your payroll processing company to ensure they are updating the minimum wage and salary payments to employees. Do not rely on your payroll company to know or understand the minimum wage requirements here in California.

Finally, there is an initiative that qualified for the November 2024 ballot that would increase California’s minimum wage to $18 per hour and then increase each year based on the cost of living.  Employers will need to continue to monitor this initiative in 2024.

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Source: Zaller Law Group, PC 

https://www.californiaemploymentlawreport.com/2023/08/california-minimum-wage-soars-to-16-per-hour-in-2024/

Survey finds they're the important factor for retention – ahead of health coverage

by Dexter Tilo - 11 Aug 2023

As maturing Gen Z employees begin to set their sights on raising their own families, a new report has found that childcare could be key to retaining this generation at work.

A survey revealed that 30% of employees people born in the late 1990s and early 2000s consider childcare benefits as the most important factor in considering whether to stay in their current role, just behind health insurance (29%).

Nearly half (43%) of Gen Z parents said they would switch jobs for financial assistance to cover childcare costs, while more than half (52%) would do so for on-site childcare, found the survey of over 2,000 parents from KinderCare Learning Company.

Another 36% of parents said they have accepted a job that pays less but has more flexibility, while 29% admitted to moving to a new location to find childcare, according to the report.

Disconnect: Childcare benefits offered by employers

• Education funding (65%)

• Pre-tax benefits (61%)

• Subsidized childcare (60%)

• On-demand childcare (59%)

• Emergency/back up childcare provided by employer (56%)

• Mixed childcare offerings (55%)

• "Off hours" where parents are unplugged (54%)

• On-site childcare (54%)

• Co-working spaces that double as daycares (50%)

Concerning future for Gen Zs
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The findings come as 61% of the survey's overall respondents believe that there is disconnect between employers and childcare support, with 67% saying employers should offset the cost of childcare for their staff.

According to the survey, over half of the respondents would stay in their current roles for the following childcare benefits:

Gen Z employees have been growing more concerned about the surging costs of living over the past year, according to a Deloitte survey. It found that 51% are already living pay check to pay check, with 46% taking on a side job to remain afloat.

Due to the current economic uncertainty, many of them believe that it would be more difficult to seek a raise or promotion, get a new job, or request for greater work flexibility.

"Their economic concerns are also impacting their ability to plan for their future on a more personal level, with many saying it will become harder or impossible to buy a home or start a family," Deloitte said in a media release.

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Source: HRD America

https://www.hcamag.com/us/specialization/benefits/childcare-benefits-popular-with-gen-z-talent/456040

Employers still budgeting fairly large pay raises for 2024

By Kathryn Mayer - August 1, 2023

More data is coming out to paint a picture of anticipated pay increases in 2024.

New research from Seattle-based compensation software firm Payscale finds that U.S. employers are budgeting for 3.8 percent pay increases next year—down slightly from this year's average 4 percent bump.

While more than three-fourths of U.S. companies plan to increase salaries in 2024 at the same level or higher than this year, according to the company's Salary Budget Survey, the percentage of organizations expecting to lower their salary increase budgets in 2024 has risen to 22 percent from 9 percent last year—a significant jump that may indicate employers are less concerned about attraction and retention than they have been in the past couple of years.

Payscale's survey comes on the heels of a report by WTW, released in late June, which predicted that employers are budgeting an average increase of 4 percent in 2024.

WTW's Salary Budget Planning Survey, which polled more than 2,000 U.S. organizations, found 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.

The two recent salary reports indicate that employers are remaining fairly aggressive both due to the continued tight labor market and to higher employee expectations around salaries—Payscale in its report says that workers may continue to expect higher pay increases to regain some of the lost value eaten up by high inflation last year—but that aggressiveness appears to be slowing.

With inflation decreasing from its red-hot pace—last summer it hit a 40-year high of 9.1 percent, but has eased to 3 percent in the Consumer Price Index's latest reading—and the labor market loosening, employers want to bring pay increases down to more conservative levels in 2024, said Ruth Thomas, pay equity strategist at Payscale.

However, she warned employers won't want to dip too much as "it is still very much an employees' labor market with skills shortages persisting in some sectors."

Employee expectations have increased around pay due to both inflation and the tight labor market. A massive employee survey of more than 32,000 workers this spring from the ADP Research Institute, for instance, found that the overwhelming majority of workers expect a bigger payday from their employers, and they may be ready to walk if they don't get it. Companies including Chobani, the Home Depot, Walmart and Delta have recently announced pay bumps for employees.

Although the surveys around pay predictions for 2024 are important gauges for HR leaders planning compensation strategies, analysts say the forecasts are just that—a forecast.

"This is a bit like looking into a crystal ball, as it is only July and we are talking about budgets for 2024," said Lesli Jennings, North America leader of work, rewards and careers at WTW.

The salary predictions usually change slightly in reality: For instance, Payscale last year found that employers projected a 3.8 percent pay hike on average, but the actual increase has been at 4 percent this year.

The wild card for 2024 salary predictions is a potential recession, which some analysts have warned about for months.

"When it comes to pay increases, the last few years have indicated that the new normal may be in the 3.5 percent to 4 percent range, but that could change if we go into a recession," Thomas said.

In addition to salary budget reports, Thomas noted, "organizations will need to keep an eye on wage growth trends and continue to invest in up-to-date market data to remain competitive and ensure that pay is fair."

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Source: Society for Human Resource Management

https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/payscale-2024-salary-pay-budget-employer-forecast.aspx