44% of organizations are hiring individuals at higher salary ranges
According to recent survey data from WTW, US companies are preparing for an average 4.0% salary increase in 2024. Although this figure is lower than the actual increase of 4.4% observed this year, it remains higher than the 3.1% increase recorded in 2021.
Hatti Johansson, the research director of Reward Data Intelligence at WTW, commented on the forecasted salary increases, saying, “While we are seeing a decrease in salary growth projections for next year, they still surpass the levels witnessed over the past decade. This indicates that companies are striving to maintain competitiveness amidst a constantly evolving work environment.”
The decisions made by 61% of firms regarding changes in their salary budgets were influenced by worker shortages. Inflationary pressure was the second most cited factor, mentioned by 60% of respondents. Other reasons prompting adjustments to salary budgets included concerns about employee expectations (24%), anticipation of a recession or weaker financial results (23%), and cost management (20%).
The survey also revealed that 51% of organizations experienced difficulties attracting or retaining employees this year, compared to 57% in the previous year. However, respondents anticipate a relief in labor market pressures, with only 35% expecting difficulties in 2024.
Meanwhile, the report highlighted that organizations are taking proactive measures to attract and retain talent in response to ongoing pressures. Fifty percent of respondents have reviewed the compensation of specific employee groups, and an additional 28% are considering doing the same. Moreover, 44% of organizations are hiring individuals at higher salary ranges, raising starting salary ranges, reviewing the compensation of all employees, and enhancing the use of retention bonuses or spot awards. Non-monetary strategies to attract and retain talent are also being implemented.
The survey was conducted between April and June, with approximately 33,000 responses collected from companies across 150 countries worldwide. In the United States, 2,090 organizations participated in the study.
