It has been suggested that employees may be getting smaller raises in 2024 due to economic factors.
To learn about companies’ plans for 2024 raises, in October, ResumeBuilder.com surveyed 600 business leaders.
Key findings:
- 26% of companies will not or may not give raises next year
- Half of companies giving raises say less than half of employees will receive one
- Half of companies giving cost-of-living adjustment say it will be 3% or less
- 52% of business leaders anticipate layoffs in 2024
- 1 in 3 business leaders say it’s most important to compensate senior, executive-level employees
- Three-quarters of business leaders believe it’s an employer market
1 in 4 companies may not give raises in 2024
Eight percent of business leaders surveyed say their company will not give raises to any employees in 2024, while 18% say the company has not yet decided. Overall, 74% of business leaders say their company plans to give raises.
“Cost of living raises are incredibly important to the majority of the workforce who may already be underpaid and whose wages have not kept up with inflation. Although the inflation rate has slowed down to 3.6%, any increase that is less than 4% is not an increase to one’s earning power and wages,” says Stacie Haller, chief career advisor.
“Many need to understand that only offering a cost of living adjustment is not a raise and may not even compensate for the loss of workers’ earning power due to inflation. A cost of living adjustment should just be a baseline to then compensate an employee for performance and/or promotions. Salary raises due to performance and promotions are important to employees who want to earn what they are worth in the market.”
Half of companies giving raises say less than half of employees will receive one
While three-quarters of businesses do plan to give raises, not all employees will get one.
Half of business leaders say 50% or less of employees at their company will actually receive a raise, and only 14% say all employees at the company will get a raise.
Seventy-nine percent of companies did say for employees who are getting raises, those raises would be bigger than recent years.
On the other hand, more than half of business leaders say they anticipate their company having layoffs in 2024.
“Giving raises to some employees and not others fuels resentment within an organization,” says Haller. “Employees talk to each other and information spreads quickly through an organization. Everyone wants to be treated equally.”
“With salary guides proliferating on the internet, it’s easy for workers to understand their worth in the market. Job postings more often now have salary parameters and employees may also be able to see what salaries their own organization is posting.
“There still is a war for talent in many industries and in these industries candidates have other employment options if they do not feel they are valued. At a minimum employees expect a cost of living increase, and without it they will leave.”
Nearly half of cost-of-living adjustments will be 3% or less
Of business leaders who say their company will give raises in 2024, 82% say the company will give performance-based raises, 69% cost-of-living adjustments, and 55% promotional-based raises.
In terms of cost-of-living adjustments, 27% of business leaders whose company will offer this compensation adjustment say it will be 5% or more. 28% say 4%, 32% say 3%, 11% say 2%, and 2% say 1% or less.
Abhi Madan, creative director at Amarra discusses the company’s approach to raises.
“The fashion industry, like many others, is emerging from an era of unprecedented challenges. With changes in consumer behavior, supply chain disruptions, and increased competition, many fashion businesses are rethinking their growth and compensation strategies.
“The overall success and growth of our brand will be key factors in determining the compensation adjustments. Additionally, we will consider the individual employee’s contribution to our success. We believe in recognizing and rewarding our team members who have made significant contributions to our success.
“If the economy and our business continue to improve in 2024, we plan to reward our team members accordingly. A positive business outlook and growth will enable us to provide more substantial compensation adjustments. However, if challenges persist, we may need to be more conservative in our approach. We understand the importance of compensating our team members fairly, but we must also ensure the viability of the business.”
1 in 3 business leaders think it’s most important to compensate senior, executive-level employees
A number of employers feel it’s more important to compensate higher-level employees than other employees.
When asked which groups of employees, if any, they believe it’s most important to give raises to in 2024, 17% of respondents say executive-level and 18% say senior-level employees.
“It’s not a good business move for business leaders to focus on executive level compensation over other groups of employees. Last year CEOs were on average paid 273 times as much as their employees, and this is just not equitable. The result is or will be workers revolting against this inequality,” says Haller.
Three-quarters of business leaders say it’s an employer job market
Nearly three-quarters (74%) of business leaders surveyed agree with the statement we currently have an employer vs. employee job market, while 13% disagree and 13% are unsure.
Methodology
This survey was commissioned by ResumeBuilder.com and conducted online by the survey platform Pollfish. It was launched on October 4, 2023, and 600 respondents completed the full survey.
To qualify for the survey all participants had to work at a company with at least 11 employees and have have one of the following job titles: C-level executive, director, president/CEO/chairperson, owner or partner, chief financial officer, or HR manager. Respondents also had to have a household income of at least $75,000.
A screening question was used to ensure respondents were familiar with the company’s budget for compensation in 2024.
To avoid bias Pollfish employs Random Device Engagement (RDE) to ensure both random and organic surveying. Learn more about Pollfish’s survey methodology or contact [email protected] for more information.
