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The latest Salary Budget Planning Report by Willis Towers Watson (WTW) shows that salary budget increases are expected to rise by 3.9% in 2025, with the overall median pay raise for 2024 dropping to 4.1% from 4.5% in 2023. Despite this decrease, this figure remains high compared to previous cycles, where 3% was common.
The report collected responses from 32,000 companies globally, including 1,888 U.S. organizations. Other report notables include:
- 47% of U.S. organizations reported lower salary budgets in 2024 compared to 2023
- Total annual payroll expenses including benefits, salaries, bonuses, etc. are rising significantly, with 73% of U.S. companies reporting higher expenses compared to last year
- 49% of companies are hiring at higher salaries
Employer Takeaway
Employers will continue to raise salaries to align with inflation rates and stay competitive within the labor market. Although the recent surge in employee resignations and turnover has eased, compensation continues to play a vital role in attracting and retaining talent. Organizations should anticipate sustained growth in wage increments in the foreseeable future. It is imperative for employers to stay vigilant in monitoring inflation, industry trends, and the labor market landscape. Download the bulletin for more details.
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