Dive Brief:
- Motivated by inflation, growing responsibilities and a feeling of being underpaid, nearly two-thirds of workers plan to ask for a raise before the end of the year, according to a survey of more than 1,000 workers and 2,000 HR leaders from talent firm Robert Half. One-third of respondents said they plan to look for a new job if they don’t receive a raise.
- Companies seem to be feeling the pressure, with nearly half saying that meeting employee salary expectations is a top hiring challenge. To beat the competition, 51% said they are increasing starting salaries, 40% are offering signing bonuses and 36% are offering retention bonuses.
- Companies are also leaning on salary transparency. Six in 10 said being transparent about salary in job postings helps attract top candidates and edge out competitors. And 4 in 10 respondents said they expect to see a salary range in job postings.
Dive Insight:
As employer plans for 2024 salary budgets evolve, workers do not appear to be backing down on their demands. Employees’ sense of power, a theme throughout the pandemic, has not flagged much despite shifting economic winds over the past year.
Businesses dolled out big pay raises in 2023, building on major growth in salary investment that started in 2022 and has been driven by factors like inflation and a tight labor market. While these elements have loosened their grip on the economy, employers have generally not planned to drastically reduce their investment in salaries, surveys throughout the year have shown.
A recent Mercer poll found that employers plan to slow salary growth slightly in 2024 — to 3.9% from 4.1% in 2023. But that remains higher than the typical annual threshold of 3%, showing employers may be adjusting to employee expectations over the long term.
“To attract and retain top talent — particularly in an uncertain economy — it’s critical for employers to benchmark salaries and compensation packages, consider options for hybrid work, and employ strategies to bolster employee engagement and morale,” Dawn Fay, operational president of Robert Half, said in a statement.
Companies that may be struggling to meet high pay expectations may be able to raise their competitive edge by embracing flexibility; employees have reported they’d go so far as to take a pay cut in order to work from home.
