The median pay raise in 2024 fell to 4.1% from the previous year’s median increase of 4.5%, according to the Salary Budget Planning Report released today by WTW. In addition, 47% of US organizations reported their salary budgets for 2024 are lower than the previous year.
Employers anticipate longer-term stability in their employee base following a period of high resignation and turnover, according to WTW.
The report also found that fewer employers reported difficulty attracting and retaining talent this year. Just 38% are having trouble this year compared to 57% two years ago.
“As the workplace stabilizes and employers look more toward the future, companies are reviewing and updating their compensation philosophies to ensure they align with business strategy,” Lesli Jennings, North America leader of work, rewards and careers, at WTW said in a press release.
Overall salary budget increases are expected to rise by 3.9% in 2025, which — despite declining since 2023 — remain fairly high, according to WTW. Total annual payroll expenses continue to rise, with 73% of companies reporting their total payroll expense was higher this year than last. Total annual payroll expenses include salaries, bonuses, variable pay and benefit costs.
WTW’s data is based on a survey that took place from April to June and included 1,888 organizations in the US. It was part of a larger group of 32,000 responses from 168 countries worldwide.
Source: Staffing Industry Analysts
