**Current Trends in Compensation**
For those eyeing significant raises or promotions in 2024, it may be beneficial to temper expectations. According to recent findings from Mercer, an HR consulting firm, U.S. companies are gearing up to curtail expenditures on pay increases and promotions due to a stabilizing job market and subsiding inflation. Specifically, total salary budgets are projected to increase by only 3.6% in 2024, a decrease from 4.1% in 2023. This projection is based on analyses from over 1,000 U.S. organizations across 15 industries.
**Promotion Rates Decreasing**
There is also a noticeable pullback in promotion rates; whereas 10.3% of employees were promoted in 2023, only 8% are expected to receive promotions in 2024. The reduction in raises and promotions may not be explicitly detailed by Mercer, but underlying economic uncertainties are purportedly influencing these decisions.
**Resetting Expectations Post 'Great Resignation'**
Despite these cutbacks, U.S. companies are still offering higher salary increases than in the years following the 2008 financial crisis, where raises averaged around 3% per annum. According to further research by Willis Towers Watson, raises are expected to average 4% in 2024. This adjustment represents a shift towards more traditional pre-pandemic compensation norms and a reduction from the inflated wage pressures employers experienced during the 'great resignation.'
**Alternate Strategies for Employee Retention**
With less emphasis on monetary compensation, companies are increasingly focusing on alternative benefits to maintain employee satisfaction and retention. Mercer has noted that 62% of organizations plan to offer off-cycle salary increments—a non-standard approach to retaining talent. Additional investments are being made in non-monetary rewards and employee benefits to enhance morale and engagement, including student loan assistance, mental health stipends, and extensive professional development programs.
**Broader Approaches to Employee Motivation**
Flexibility in work schedules, extra paid time off, and major investments in training programs are among the strategies being emphasized to improve job satisfaction and retention, without solely relying on raises or promotions. These approaches underscore a broader, more holistic strategy toward employee welfare and workplace motivation, especially during times when traditional incentives like pay hikes or title advancements are less feasible.