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Diving summary:

• While the average salary increase remained at 4% in 2024, average increases fell from 4.3% to 3.9%, according to the results of a survey compiled by Salary.com of more than 1,000 human resources professionals in USA and Canada.
• The drop is due to fewer companies offering higher raises, Salary.com found; Only 14% of companies granted increases of between 5% and 6.9%, compared to 25% of companies in the previous survey. Additionally, more companies (38% in 2024, compared to 25% in 2023) returned to “typical” pay increases in the range of 3% to 3.9%.
• “Last year, we noted that pay increases could be at their peak, even as 4 percent is becoming the norm,” said Andy Miller, vice president of compensation consulting at Salary.com, in a press release from October 29. “While 4 percent remained the average in 2024, closer analysis suggests a shift is occurring.”

Diving information:

Respondents told Salary.com they expected the trend to continue in 2025.

As it rose and remained high in recent years, experts were unsure when the rate of increase in the wage budget would fall back to pre-pandemic levels, or if it would at all. Last fall, compensation experts questioned whether the 4% average increase was becoming the new normal, compared to what had been the standard 3%.

While the average increase remained at 4% this year, a rate it has been since 2022, a drop in average increases suggests companies are not afraid to drop to pre-pandemic levels in the 3-3.9% range. . . The Salary.com data matches WTW’s findings from July, which showed that employers planned a average salary increase of 3.9% by 2025.

Some employers may be relieved by the leveling of the salary budget, but workers still have high expectations set in recent years, and HR is feeling the pain. TO March pay scale analysis found that despite changes in the economy, employees still expected competitive salaries and HR viewed compensation as its biggest challenge. And more recently, employers told WTW they were not effectively comply with your salary programseven in elements such as recruiting, retaining and rewarding employees for their performance.

Despite the broader change in median pay, some industries saw larger median increases, particularly construction and the education, government, and nonprofit sectors. In contrast, hospitality and transportation experienced below-average average wage increases. Employers also continue to explore salary strategies for remote employees, Salary.com noted.