As employers begin to figure out their 2025 pay strategies, new data indicates that next year’s raises may be even lower than what other reports have estimated.
Payscale’s new Salary Budget Survey, which polled compensation professionals at 1,550 organizations between April and June, found that U.S. employers are planning for 3.5% pay raises on average next year—a dip from the past couple of years—due to a cooling labor market. Actual salary increase rates for U.S. employers were 4% in 2023 and 3.6% this year, according to Payscale, a U.S. compensation software and data company.
The majority of U.S. employers (66%) said 2025 salary increase budgets are expected to be the same as their 2024 salary budgets, 19% said 2025 salary budgets are expected to be higher, and 15% said they expect them to be lower.
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Employers Budgeting for 3.5% Pay Raises Next Year
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Salary Increases 2024
With eyes on compensation plans for the coming year, another report is painting a picture of where employers are with pay raises in 2024.
The vast majority of senior finance leaders (71 percent) plan to give raises of at least 4 percent in 2024, according to a new survey of chief financial officers (CFOs) by Gartner.
In most areas, those raises would outpace inflation, which recently has hovered just above 3 percent, according to government figures.
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