MONEYWATCH! 2024 Employee Salary Increase Expected

Millions of U.S. workers hoping for a large wage raise in 2024 to beat inflation.

US inflation. Salary increase (Photo: freepik)

Salary Projections for 2024: Modest Dip but Optimistic Outlook for Employee Raises

A WTW survey found that employers plan to raise salaries by 4% in 2024, down from 4.4% in 2023 but up from 3% in previous years. Korn Ferry anticipates a 4% median pay rise, up over the preceding decade.

Engineers received a 5% pay raise in 2023, while retail and education received lesser increases. Even though they earn less than private-sector workers, federal workers are set to get a 5.2% rise next year.

In addition to a good increase, 55% of WTW-surveyed businesses provide remote, in-office, or hybrid work to keep workers satisfied.

READ ALSO: Stock analysts who got it wrong last year predict a soft landing in 2024

WTW reports two primary wage considerations that influence companies

First, despite decreased inflation, Americans spend more for food, housing, health care, and other essentials. The typical American family must spend $11,434 more per year to maintain their level of living than three years ago, when inflation hit 40-year highs, according to Republican Senate Joint Economic Committee members’ analysis of official statistics.

Second, millions of pandemic sufferers quit, tightening the job market. Companies must provide competitive merit increases to retain staff in the talent wars.

WTW interviewed 1,800 U.S. companies for global compensation estimates. Above-average pay increases in the next years may not be enough to offset the U.S.’s stalling wage growth. According to Census data, 4 in 10 Americans struggle financially. Despite falling inflation, 60% of working Americans say their wage has trailed behind inflation over the last year, according to a Bankrate study.

READ ALSO: U.S. labor market is still robust with nearly 200,000 jobs created in November