US employers are planning to offer lower pay raises and fewer promotions next year, compared to what they gave this year.
The survey was carried out by Mercer, a human resources consultancy. More than 900 of its clients, who are employers of varying sizes across 15 industries, participated in the survey.
According to Mercer, compensation budgets for merit increases are expected to grow by an average of 3.5% in 2024, down from 3.8% this year. Merit increases are the pay bumps related to your prior year's performance.
The average salary increase for non-union employees is expected to go up by 3.9% on average, down from 4.1% this year. These include promotions and other reasons like minimum wage adjustments or off-cycle raises, which may be offered to retain someone if a competitor tries to hire them away.
Also notable, employers surveyed said they are planning to promote fewer employees - just 8.7% of their staff on average down from 10.3% this year.
Although the expected pay increases are lower compared to 2023, they are still higher than they typically were before the pandemic.
The survey was completed between July 31 and August 11, so it's just an early look at what employers are thinking as they plan for 2024.
The compensation budgets for next year won't be finalized until December or even January. The anticipated pay hikes for next year reflect the ongoing tightness of the labor market and low levels of unemployment. However, if the labor market continues to stabilize and inflation cools further as we move towards the end of the year, compensation pressures are likely to continue to decrease, Mason said.
Employers could further trim their planned pay increases, which could be a significant cost-cutting measure.
Mason said he did not know whether he would be fired, and said he did not know if he would be fired.