With inflation moderating and many economists predicting a soft landing for the economy, WorldatWork’s Salary Budget Survey finds a surge in salary increase budgets to their highest point in two decades and a surprising deviation from last year’s projections. U.S. respondents reported an unexpected boost in 2023 average salary increase budgets, which grew by 0.3% to reach 4.4%, but also foresee a return to a 4.1% average increase budget for 2024.
The survey also found that layoffs are predicted to cool significantly around the globe with 91% anticipating no layoffs in 2024. Other key findings of the survey include the following.
â—Ź Timing of pay increases. The average time between increases is at or slightly lower than the historical average of 12 months in all countries.
â—Ź Pay for performance. U.S. employers reported that high-performing employees (26% of their workforce) received merit increases 1.4% higher than those for middle performers and 3.9% higher than low performers.
â—Ź United Kingdom salary increase budget growth. In 2023, the United Kingdom’s average total salary increase budget exceeded projections, reaching 4.5% (4.0% median) compared to the projected 3.9%.
â—Ź India shows strength. India again shows the largest salary increase budget in the survey, averaging 9.8%. This figure, slightly lower than 2022’s 10.1%, draws closer to the pre-pandemic level of 9.9%.
â—Ź Consistent growth in Mexico. Mexico has witnessed steady expansion of its salary increase budgets, progressing from 4.7% in 2021, 5.7% in 2022, to 6.3% in 2023.
