US employers plan more modest compensation increases in 2024
25 Setembro 2023 - 10:28AM
Business Wire
Today, Mercer, a global leader in redefining the world of work,
reshaping retirement and investment outcomes, and unlocking real
health and well-being, and a business of Marsh McLennan (NYSE:
MMC), released the results of its August 2023 Mercer QuickPulse™ US
Compensation Planning Survey. According to the survey, employers in
the US plan to raise their compensation budgets by 3.5% for merit
increases for 2024 and 3.9% for their total salary increase budgets
for non-unionized employees. This compares to actual merit
increases of 3.8% and 4.1% for total salary increase budgets for
non-unionized employees in 2023.i
“While preliminary compensation budgets for 2024 are showing a
slight decline, they remain well above pre-pandemic levels,
reflecting 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 decline.
This could prompt further reductions in 2024 compensation increase
budgets, as employers adjust their strategies to reflect the
changing economic landscape,” said Lauren Mason, Senior Principal,
Career, Mercer.
Across industries, Healthcare Services are projecting 2024
budgets that lag other industries, with merit budgets of 3.1% and
total increase budgets of 3.4%, as the industry continues to
recover from the financial impact of the pandemic. Recent layoffs
and financial strain on the high-tech industry also appear to be
impacting merit budgets, with projected increases of 3.3%, a
reversal of historical trends where high-tech typically led
increases across industries. Several industries, including Energy
and Consumer Goods, are planning merit budgets above the national
average, projecting an increase of 3.7%.
The survey also found that employers are planning to promote
less (8.7% of the employee population) and therefore will allocate
less of their budget (1.1%) to promotional increases in 2024. In
2023, employers reported that they promoted 10.3% of their
population, allocating 1.2% of their salary budget to do so.
Looking back at actual compensation increases over the last
year, employer base salary levels increased 5.6%ii on average,
despite 2023 merit increase budgets of 3.8%. This is a result of
off-cycle pay increases which 59% of employers reported providing
in 2023. The top reasons cited for off-cycle increases were to
address retention concerns, counteroffers, market adjustments, and
internal equity.
Ms. Mason continued, “As employers plan for 2024, it is crucial
that they move away from the reactive approach of the past few
years and adopt a more strategic approach. This will enable
employers to focus their compensation investments on the most
critical attraction and retention segments of their workforce,
while also ensuring that pay increases are distributed fairly and
equitably.”
Note to editors:
Total increase budgets include other base pay increases such as
promotional pay increases and cost of living adjustments, in
addition to merit increases.
About Mercer’s US Compensation Planning Survey
The August 2023 Mercer QuickPulse™ US Compensation Planning
Survey includes data from more than 900 organizations in the US,
from small employee bases (less than 500 employees) to very large
employee bases (over 20,000 employees) across 15 industries. This
study was fielded between July 31st - August 11th. You can review
more of the survey findings here.
About Mercer
Mercer believes in building brighter futures by redefining the
world of work, reshaping retirement and investment outcomes, and
unlocking real health and well-being. Mercer’s approximately 25,000
employees are based in 43 countries and the firm operates in 130
countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the
world’s leading professional services firm in the areas of risk,
strategy and people, with more than 85,000 colleagues and annual
revenue of over $20 billion. Through its market-leading businesses
including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan
helps clients navigate an increasingly dynamic and complex
environment. For more information, visit mercer.com. Follow Mercer
on LinkedIn and Twitter.
_________________________ i March 2023 QuickPulse US
Compensation Planning Survey ii Analysis of Mercer’s Benchmark
Database, representing the average base salary change for employees
who remained with the same organization. Based on the average
year-over-year base pay change for the same incumbents, in the same
job. Represents an average of executives (5.1%), managers (5.9%),
professionals (5.4%) and para-professionals (5.8%).
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Media: Cassie Lenski Cassie.Lenski@mercer.com (469)
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