U.S. employers plan to increase worker pay by 3.8% on average in 2024, according to Payscale’s 8th annual Salary Budget Survey. So far in 2023, pay increases have averaged 4.0%.
Salary increase budgets for next year will be the same or higher than they were last year for 78% of U.S. and 81% of Canadian companies. Payscale notes that with inflation coming down, employers want to back off of the very high increases seen in 2022, but workers may continue to expect bigger raises to counteract last year’s inflation.
“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,” said Ruth Thomas, pay equity strategist at Payscale. “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. In addition to salary budget reports, 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.”
