Short dive:
- While the average salary increase remained at 4% in 2024, average raises fell from 4.3% to 3.9%, according to survey results of more than 1,000 human resources professionals in the United States collected by Salary.com and Canada.
- The decline is due to fewer companies handing out higher raises, Salary.com found; only 14% of companies gave raises between 5% and 6.9%, compared to 25% of companies in the previous survey. Additionally, more companies – 38% in 2024, compared to 25% in 2023 – have returned to “typical” wage increases of between 3% and 3.9%.
- “Last year we noted that salary increases could peak, even if 4% becomes the norm,” said Andy Miller, vice president of compensation consulting at Salary.com. a press release dated October 29. “Although 4% remained the median in 2024, further analysis suggests a shift is underway.”
Diving information:
Respondents told Salary.com they expect the trend to continue into 2025.
As it has risen and continued to remain high in recent years, experts were unsure when the rate of increase in the wage budget would return to pre-pandemic levels, or if it would happen at all. Last fall, compensation experts wondered whether the average increase of 4%. was becoming the new normal, compared to what had been the 3% standard.
While the average increase has remained at 4% this year – a rate it has been at since 2022 – a decline in average increases suggests companies are not afraid to ride the incline back to pre-pandemic levels in the 3- 3.9%. . The Salary.com data follows WTW findings from July, which showed that employers planned a average salary increase of 3.9% for 2025.
Some employers may be relieved by the leveling of the salary budget, but workers still have high expectations set in recent years – and HR suffers. A Salary scale analysis since March found that despite changes in the economy, employees still expected competitive pay and HR considered pay the biggest challenge. And more recently, employers told WTW they weren’t effectively deliver their compensation programsincluding on elements such as recruiting, retaining and rewarding employees for performance.
Despite the larger shift in average wages, some industries saw larger average increases, particularly construction and the education, government and nonprofit sectors. In contrast, hospitality and transportation saw lower-than-average average wage increases. Additionally, employers are still exploring compensation strategies for remote employees, Salary.com noted.