2024 Salary Increase Budgets Moderate; 2025 Projections Indicate Further Contraction

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Aug 01, 2024, 08:25 ET

WorldatWork Survey finds 70% of organizations are taking action on pay equity.

SCOTTSDALE, Ariz., Aug. 1, 2024 /PRNewswire/ -- A year ago, participants in WorldatWork's 2023-2024 Salary Budget Survey predicted a decline in salary increase budgets for 2024 across most of the world. Most countries indeed experienced a drop in 2024 salary increase budgets compared to 2023, often exceeding the forecast. Projections for 2025 suggest further contraction of salary increase budgets is expected in 2025 in almost all surveyed countries according to WorldatWork's 51^st annual Salary Budget Survey. WorldatWork, the Total Rewards association, is the leading provider of comprehensive compensation data and insights. The 2024-2025 Salary Budget Survey, covering nearly 17 million employees from 22 countries, reports detailed information about actual base salary increase and merit budgets for 2024 and projections for 2025.

After forecasting that average overall salary increase budgets would drop to 4.1% this year, U.S. respondents reported that average overall salary increase budgets fell from 4.4% in 2023 to 3.9% this year. They foresee a slight additional decline in 2025 to a 3.8% average budget. In addition to contracting salary increase budgets, this year's study also revealed that in the U.S. the reported range of salary increase budget amounts is consolidating. 2024 data show fewer extreme budgets, low or high, than in recent years. And within the U.S. and Canada, geographic variation is modest.

WorldatWork's Salary Budget Survey is the longest-running survey of its kind. It is a key resource for Total Rewards and HR professionals and their C-suite partners. With year-over-year data, decision-makers can devise competitive compensation strategies and comprehensive rewards systems to help attract and retain high-caliber employees.

An easy-to-use Online Reporting Tool facilitates tailored reporting based on industry, organization size and/or geographic region (within the U.S. and Canada), helping compensation, Total Rewards, and HR professionals prepare informed salary budget recommendations for their organizations. The Online Reporting Tool allows you to better understand the complex interrelationships of geography, organization size, industry, and workforce composition to develop the best recommendations for your organization.

"Organizations of all kinds, from government entities to global multi-nationals to mid- and large-market enterprises to small businesses, rely on this annual survey to benchmark and plan salary increase budgets that will sustain the workforces they need," said Sue Holloway, Director, WorldatWork. "This study reveals that compensation professionals have a nuanced grasp of the factors impacting salary budgets. They were able to foresee the decline in salary increase budgets that we've observed this year. We look forward to continuing to support Total Rewards pros as they leverage data and think strategically to formulate 2025 compensation budget recommendations and negotiate with CFOs."

Report Highlights:   

Additional countries included in 2024: New to this year's study are data from the Gulf Cooperation Council (GCC) countries, South Africa, South Korea, and Vietnam.
New industry data for Pharma. For the first time this year, data are available for Pharma as a standalone industry.
Organizations are taking action on equity. Across the U.S., Canada, the UK, and India, the majority of organizations anticipate making pay adjustments to remediate pay equity issues in 2025. These adjustments may include both those required to maintain internal equity among employees as well as those needed to resolve unwarranted differences in pay between different groups of workers.
Canadian salary increase budgets came in at predicted levels in 2024. After correctly predicting that 2024 salary increase budgets in Canada would average 3.9%, Canadian HR pros anticipate a slight additional decline in 2025 to 3.7%
India's substantial increase budgets. India again shows the largest average salary increase budget in the survey, averaging 9.6% for 2024. This figure, matching last year's prediction for 2024 is a four-tenths decrease from last year's average of 10%.
UK salary structure adjustments slow in 2024 but exceed predictions. Coming in at 4.3% in 2024, salary increase budgets in the UK came in at the level projected by participants in last year's Salary Budget Survey, but salary structure adjustments slightly exceeded predictions. Nonetheless, 2024 structure adjustments, averaging 3.1% in 2024, are lower than 2023 adjustments and are projected to decline further in 2025.

Methodology:
WorldatWork collected survey data for the "2024-2025 Salary Budget Survey" from April 8, 2024, to June 15, 2024. The survey was completed by 2,249 organizations, many of which reported data for multiple countries, resulting in 6,536 unique survey responses. Members were asked to respond for the U.S. and 24 other countries: Australia, Belgium, Brazil, Canada, China, France, GCC Countries, Germany, India, Italy, Japan, Mexico, Netherlands, New Zealand, Nigeria, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, the United Kingdom, the United States, and Vietnam. (Insufficient responses were received in 2024 to report data from New Zealand, Nigeria, or Russia.)

About WorldatWork:   
WorldatWork is the leading global nonprofit association for professionals engaged in the critically important practice of Total Rewards. We serve those who are responsible for cultivating inspired, engaged, productive, and committed workers in effective and rewarding workplaces. We guide them in the design and delivery of Total Rewards programs with our membership, education, certification, idea exchange, thought leadership, knowledge creation, information sharing, research, and networking. For more than 65 years, WorldatWork has served Total Rewards professionals throughout the world working in organizations of all sizes and structures. Professionals from more than 93% of Fortune 500® organizations rely on WorldatWork for Total Rewards solutions.

Media Contact:
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SOURCE WorldatWork