Standard annual pay raises of years past will no longer suffice as workers expect higher pay raises from their employers next year, Fortune reported Aug. 7, citing data from Payscale's Salary Budget Survey.
Last year, respondents planned on base salary increases of 3.8 percent, on average, in the U.S. for 2023, although actual salary increases for 2023 were 4 percent, according to Payscale's survey. Moving into 2024, organizations again are planning on the same increases.
Payscale clients and contacts were invited to participate in the survey, which was conducted in May and June, resulting in 1,757 usable submissions. Respondents include various healthcare participants, such as Oakland, Calif.-based Kaiser Permanente; Marshfield (Wis.) Clinic Health System; the American Medical Association; Gainesville, Fla.-based UF Health Shands Hospital; and UnitedHealth Group, among others.
Respondents were asked to submit data for U.S., Canada and selected international locations for non-exempt employees; exempt (non-management) employees; managers; and officers and executives.
"Given cooling market conditions and easing fears of a recession, this prediction [of 3.8 percent] may be closer to the truth in 2024 as organizations strive to achieve equilibrium," Payscale's report states.
"Unsurprisingly, a strong majority of organizations (78 percent in the United States and 81 percent in Canada) predict that their salary increase budget will be either higher than last year or the same as last year, with the top cited reason being competition for labor. In fact, pay raises slightly over 3 percent may become the new normal."
However, decisions on raises are more complex than following the national average increase number, Ruth Thomas, a pay equity strategist at Payscale, cautioned, according to Fortune. Ms. Thomas noted that expected raises vary by geography and industry.
In U.S. hospitals, exempt (non-management) employees are expected to see a 3.2 percent salary increase next year.
Read more about the survey methodology here.