DON’T EXPECT THE SAME RAISE YOU GOT LAST YEAR

Is Your Expected Raise Taking a Backseat Next Year? Here's What the Data Says

With the close of another year, many professionals eagerly await discussions of annual raises and merit-based bonuses. However, recent reports suggest that employees should recalibrate their expectations for the coming year.

The Trend Shift in Merit Raises A report from Bloomberg has highlighted that companies are reconsidering their budgets designated for merit raises in the forthcoming year. This revelation might come as a shock to many, especially given that we've seen consistent salary hikes in the past two years.

The Numbers Breakdown In a comprehensive survey orchestrated by Aon Plc, which compiled compensation data from over 5,500 U.S. employers, the findings are quite illuminating:

• Merit raises for the next year are pegged to average around 3.7% across all sectors.
• This is a subtle dip from the 3.9% escalation observed this year.

The rationale behind this tightening of purse strings? Companies are re-evaluating their labor budgets, and the inflation rates are gradually stabilizing from the soaring highs of the previous year.

Corroborating the Trend A separate survey by workplace consultant Mercer echoes a similar sentiment:

• Projected merit-based salary hikes stand at 3.5% for the upcoming year.
• A noticeable decrease from the 3.9% benchmark set in 2023.

Navigating the Changing Compensation Landscape For businesses, this shift underscores the importance of innovation in compensation strategies. To retain top talent and maintain a motivated workforce, it may be time to think beyond traditional salary hikes and explore alternative incentives and benefits.

If you're a business leader or HR professional grappling with these impending changes and seeking guidance on devising creative compensation packages, our team at Outside Legal Counsel LLP is here to assist. Let's delve deep into innovative solutions that align with your organization's goals and the evolving market dynamics.

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Note: The information shared in this article is not a substitute for legal advice and is intended for informational purposes only. It constitutes attorney advertising.