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According to the latest Salary Budget Planning Survey conducted by WTW, U.S. employers are gearing up to provide a salary increase of 4% in 2024. This surpasses the 3.1% increase in 2021 and previous years, although slightly lower than the actual average increase of 4.4% in 2023. The driving force behind this salary hike is the rising inflationary pressures and concerns over the tight labor market conditions, according to survey results.
While inflation has cooled down from the 40-year high of 9.1% in June 2022, employees are still dealing with the increased costs of food, healthcare, housing, and other expenses. A recent study by Bank of America revealed that months of high living costs have caused employees' financial well-being to hit a record low.
The competition for skilled labor remains fierce, with voluntary turnover and attrition standing at 11% overall, despite fewer employers reporting problems finding and retaining workers.
Employers are not solely relying on pay bumps to attract, retain, and support their employees in 2024. According to WTW, many organizations are enhancing nonmonetary perks including expanding efforts to enhance the overall employee experience (55%), improved workplace flexibility (63%), and increasing their focus on diversity, equity, and inclusion (60%). Many employers have pledged to recruit top-tier talent with more competitive salary packages (55%) and 54% are also committed to conducting comprehensive compensation reviews for specific employee groups, while 49% are raising the bar by increasing starting salary ranges.
These findings shed light on the evolving landscape of employee benefits and reflect the proactive measures employers are taking to create a supportive and rewarding work environment. Download the bulletin for more details.