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Workers received fewer — and smaller — raises in 2023, report finds

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Dive Brief:

  • Just over 40% of workers haven’t received a salary increase in the past 12 months, according to a survey of 1,500 full-time employees by BambooHR. For those who did get a raise, the average salary increase was 4.6%, compared to 6.2% in 2022. 
  • Notably, women seem to be significantly less satisfied with their salary; 27% expressed frustration with their compensation, compared to 15% of men. 
  • While a little over half of workers described themselves as happy or content with their salary, most could still be tempted away. Nearly 3 in 4 would consider leaving for a higher paycheck, but it would take an average increase of 13.3% to get them out the door, BambooHR found.

Dive Insight:

As HR leaders work to balance retention with budgetary demands, the perennial question of what workers value more — tangible elements of the job, like a competitive salary and strong benefits package, or more intangible elements, like flexibility, a vibrant culture and empathetic leadership — rages on. The answer is likely more complicated than just one or the other.

For example, respondents to a September report from HP Inc. said they’d take a 11% pay cut for more empathetic leadership and above-average employee engagement and a 13% pay cut for greater flexibility. And last January, surveyed workers told security platform provider Cerby they would take a 20% pay cut for more trust from their employer. 

But 44% of respondents to BambooHR’s survey said they’d stick with a job they disliked if the salary was high enough, and 55% of workers told United Culture that a good salary was a top factor that made them feel fulfilled at work. “This focus on salary could in part be explained by the current economic volatility and the cost-of-living crisis,” that study’s authors wrote in a report on their data, suggesting that workers may value strong compensation more the less secure they feel, and vice versa. 

In an accompanying report on its findings, BambooHR recommended employers keep an eye on market trends and regularly review and adjust compensation packages to remain competitive. 

The company also cautioned that “higher pay isn’t always the answer,” however, advising employers to communicate regularly about the company’s health and direction and to look into offering schedule flexibility and remote work.

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