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Payscale: Most companies plan 3.8% employee raises for 2024

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Dive Brief:

  • More than three-fourths of U.S. companies plan to increase salaries the same as or more than this year, according to the results of a salary budget survey by Payscale, a compensation data provider. Pay is expected to rise 3.8%, compared to 4% in 2023, according to the Wednesday results.
  • However, 22% of companies intend to cut the amount they’re dedicating to salary increases next year, up from 9% in 2023, as the labor market cools, the survey found.
  • “Although employers may want to bring salary budgets down after recent wage growth, it is still very much an employees’ labor market with skills shortages persisting in some sectors,” Ruth Thomas, pay equity strategist at Payscale, said in a news release. “When it comes to pay increases, the last few years have indicated that the new normal may be in the 3.5-4% range, but that could change if we go into a recession.

Dive Insight:

A June report by business consulting firm WTW similarly predicted average salary increases of 4% in 2024. Those increases remain “well above” those seen over the past decade, as employers try to remain competitive, a WTW researcher said in a statement. 

In addition to upping pay, employers have turned an eye to benefits packages to attract and retain talent. Some are offering free tuition, while others are subsidizing child care. 

The Society for Human Resource Management’s 2023 Employee Benefits Survey found that 33% of companies provided workers with paid leave to care for immediate family members. Employers offering other forms of leave also increased, SHRM found, with paid adoption leave up 6 percentage points from the previous year to 34% and paid child foster child leave climbing 3 percentage points to 25%.

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