Pay raise increases slowed at the end of 2023 and many executives expect them to remain tepid this year, according to a report in The Wall Street Journal.
After hovering around 3% annual raises from 2014 to 2021, raises rocketed to 4.2% and 4.4% in 2022 and 2023, respectively. However, this year companies are planning for 4% salary increases, according to a report from Willis Towers Watson, which surveyed 1,800 employers in December.
Mercer also conducted a survey of 900 employers last fall, and found employers planned for 3.5% merit raises this year, which was a three percentage point drop from 2023. Tech companies, which have traditionally boosted salaries in a bidding war for talent, plan to provide 3.2% merit raises this year, according to Mercer's survey.
Vistage Worldwide, a coaching and peer-advisory firm, conducted a survey for the Journal last month connecting with 666 companies and found around 21% planned to give smaller raises while 75% would maintain or increase pay raises this year.
The Journal notes eased inflation and a cooling job market make it easier for companies to hit the breaks on pay raise growth, but business leaders also reported pressure to retain talent through competitive raises.