Payscale’s 8th Annual Salary Budget Survey
In the 2023-2024 salary budgeting season, HR leaders and compensation professionals must determine their pay increase strategy for the coming year. Payscale’s 2023-2024 Salary Budget Survey (SBS) provides unparalleled insights on projected salary budget submissions from 1,757 organizations collected between May and June of 2023.
Payscale’s Salary Budget Survey features insightful analysis of data sourced directly from compensation professionals broken out by employee groups (non-exempt, exempt, managers, and executives), geographic segments, industry groups, and key firmographics. This includes actual salary increases from 2023, planned salary increase budgets for 2024, and salary structure increase budgets. The report also includes promotional increase budgets for the United States and Canada.
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U.S. employers plan on 3.8% salary budget increases for 2024
Overall, employers are planning on salary budget increases of 3.8% on average in 2024 — which is higher than the old standard of 3% before the COVID-19 pandemic.
With inflation decreasing and the labor market cooling compared to the last few years, organizations in the United States are hoping to reign in pay increases. However, wage growth remains elevated — at 6.1% as of Q2 2023 according to Payscale Index. Many employees are expecting pay increases to remain elevated this year to catch up to recent inflation.
Last year, participants in Payscale's Salary Budget Survey also planned on base salary increases of 3.8 percent on average in the United States. However, according to this year's Salary Budget Survey, salary increases for 2023 actually clocked-in at 4.0%. This could repeat this coming year.
Total salary increase budgets are over 4.0% in some areas. The full Salary Budget Survey shows the breakdown of total salary budget increases by industry groups, sectors, company sizes (by full-time employee count), revenues, regions, and individual states.
U.S. pay increase budgets by employee group in 2023-2024
Payscale's Salary Budget Survey Report breaks down actual pay increases for 2023 and planned pay increases for 2024 by employee group, which can be helpful for HR leaders and compensation professionals embarking on annual compensation planning.
In the United States, planned pay increases for 2024 are 3.8% for exempt employees (salaried, non-management), 3.9% for non-exempt employees (hourly), 3.8% for managers (salaried), and 3.7% for executives.
This is a decrease from actual increases in 2023 for each of these employee groups but close to estimates made during salary budget planning last year. Officers and executives might expect slightly lower salary increases in 2024 compared to 2023, due possibly to economic uncertainty or the need to allocate salary budget more strongly toward lower-wage workers.
The full report shows the breakdown of salary budget increases by industry groups, sectors, FTE counts, revenues, regions, and individual states for each employee group studied. This level of detail provides employers with niche data specific to their size, industry, and location that can empower them to make informed decisions for their employees.
Officers and executives are projected to receive base pay increases slightly lower than exempt (non-management salaried) employees and non-exempt (hourly) employees in nearly every breakout group studied. However, the survey does not account for total rewards, such as executive bonuses.
2024 salary increases planned in the US, CA, UK, and Europe
Payscale's Salary Budget Survey collects data on actual pay increases in 2023 and planned pay increases in 2024 for the United States and Canada with breakout by industry group, sector, FTE counts, revenue, region, and state/province. As discussed, planned salary increase budgets in 2024 for the United States average out at 3.8%. For Canada, salary increase budgets are a little lower at 3.6%.
Payscale's Salary Budget Survey also provides total salary increase budgets for select countries outside of North America, including Australia, Brazil, China, Finland, France, Germany, India, Ireland, Japan, Mexico, Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Sweden, and the United Kingdom (UK). When combined into a composite, planned salary increase budgets for Europe are 4.2%. For the United Kingdom, planned salary increase budgets in 2024 are 4.1%.
A Europe Edition as well as an Enterprise Edition of Payscale's 2023-2024 Salary Budget Survey with breakout will be available in the summer of 2023.
Payscale clients and contacts were invited to participate in our Salary Budget Survey May-June of 2023, resulting in 1,757 useable submissions.
Respondents were asked to submit data for the United States, Canada, and selected international locations for four employee groups:
- Non-exempt employees
- Exempt (non-management) employees
- Officers and executives
Respondents were instructed to enter no response for increase programs that do not exist in or were not applicable to their organization, and to enter a response of “0%” for programs that exist but were budgeted to receive no increase for the year in question. 0% responses were included in the calculations for the figures reported. A minimum of five responding organizations was required in order to publish. Not all participants provided all types of increases, so Total Increases reported may not equal the sum of other increases reported.
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