Survey finds U.S. Employers are Budgeting a 4% Salary Increase for 2024
According to a recent Salary Budget Planning Survey by WTW, it has been found that organizations are planning to increase budgets for employee pay by an average of 4% in the year 2024. This means many workers could see a rise in their salaries.
The survey gathered information from various companies to understand their budgeting plans for employee pay in the coming year. The results indicate that a 4% increase has been earmarked for salary adjustments across the board.
What Does this Mean for Employees?
It suggests if an employee is currently earning $50,000 per year, they might expect their salary to go up by $2,000 in 2024 (4% of $50,000). However, it’s important to remember that these are average figures, and individual pay increases may vary based on factors like job performance, grant allocations, and an organizations financial situation.
Keep in mind that the survey is a prediction and a forecasted figure, and actual pay increases might be different when the time comes. Economic changes or unexpected events could influence the budgeted plans. Nevertheless, it gives employees an idea of what employers are considering for pay adjustments in the upcoming year.
What Should Tribal Employers Do?
1. Consider Pay Compression
An effective strategy to maximize the forecasted payroll budget for increases in 2024 is to address pay compression in lieu of adding these costs directly to an employee’s base pay. Utilizing cost of living increases, also known as COLA (Cost of Living Adjustments) to address pay compression can be an effective strategy to mitigate the impact of inflation on employee salaries and maintain an internally fair and competitive compensation structure within the organization. Pay compression occurs when there is a minimal difference in pay between employees at different levels within the company, leading to a lack of salary progression and potential morale and retention issues.
To address pay compression in 2024, you will need to review where your employees fall within their pay grade, after you adjust the grade (not the employee) for a 4% increase, and prioritize based on the greatest impact overall. One solution may be to bring everyone below the minimum level of their pay grade up to the minimum level. Another solution may be to adjust pay to long-tenured employees who may not have been adjusted when minimum pay rates increased over the past couple of years.
It’s worth noting that a pay increase can positively impact an employee’s financial well-being, helping them cope with rising living costs and inflation. Additionally, it may improve overall job satisfaction and motivation in the workplace. Overall, management needs to do their due diligence to ensure fiscally responsible practices that will serve the organizations employees and remain competitive.
2. Take the Opportunity to Focus on Job Performance
Remember, while a 4% pay increase may be on the horizon for many workers, it’s essential to focus on job performance and contribution to an organization’s success. An employee that is a valuable asset to an organization can increase the chances of receiving a more substantial pay raise when the time comes.
As we move closer to 2024, the 4% pay increase in 2024, offers hope for better financial rewards for employees, but also reminds employees to stay diligent in their work to maximize their chances of receiving a fair share of the raise based on their performance.
3. Consider Potential Impacts on Indian Country
Attracting and Retaining Talent
Adjusting your compensation plan to stay on pace with the market can help many Tribal employers attract and retain skilled and talented individuals within their workforce. Offering competitive compensation is essential for retaining experienced employees and attracting new talent, which can lead to improved services and governance for the community.
Community Well-being
When employees receive higher pay, it can have a ripple effect on the broader community’s well-being. Employees may have more disposable income to spend within the local economy, potentially stimulating growth and supporting local businesses.
Budgetary Consideration
For Tribal governments and their enterprises, implementing a 4% pay increase will have budgetary implications. They will need to carefully manage their finances to accommodate the additional expenditure while ensuring that other essential programs and services are not compromised.
Potential Challenges
While a pay increase is positive news, there may be challenges in maintaining financial sustainability. If revenues from other sources (e.g., gaming, tourism, natural resources) are impacted, Tribal employers may need to strategize to balance the budget and ensure the pay increase can be sustained in the long-term.
Dustin’s career in Human Resources has spanned over 14 years within Tribal Gaming and Government with the Prairie Band Potawatomi Nation (Kansas). He has been responsible for providing support to all levels of management and employees, including, but not limited to, providing guidance on employee relations issues, conducting evaluations on policy violations, performance management, devising and implementing policies and procedures, developing compensation plans, and maintaining Employee Handbooks.