Employees should look forward to a pay raise next year, but they probably won’t look the way they think.
Per a new report from Mercer, an investment and retirement consulting firm, released the results of its August 2023 Mercer QuickPulse™ US Compensation Planning Survey, will deploy a 3.5% merit pay increase for 2024 and 3.9% for their total salary increase budgets for non-unionized employees, the results state.
“While preliminary compensation budgets for 2024 are showing a slight decline, they remain well above pre-pandemic levels, reflecting the ongoing tightness of the labor market and low levels of unemployment,” said Lauren Mason, Senior Principal, Career, Mercer in a statement. “However, if the labor market continues to stabilize and inflation cools further as we move towards the end of the year, compensation pressures are likely to continue to decline. This could prompt further reductions in 2024 compensation increase budgets, as employers adjust their strategies to reflect the changing economic landscape.”
She added: “As employers plan for 2024, it is crucial that they move away from the reactive approach of the past few years and adopt a more strategic approach. This will enable employers to focus their compensation investments on the most critical attraction and retention segments of their workforce, while also ensuring that pay increases are distributed fairly and equitably.”
The US inflation rate currently sits at 3.67%, compared to 3.18% last month and 8.26% last year, per recent data from Y Charts. Unsurprisingly, these high rates have impacted the way Americans regard their personal finances.
For example, as previously reported by ESSENCE, the Washington Post pointed out that inflation is causing more Americans to lean on BNPL (buy now pay later) to literally put food on the table. The outlet reported that the usage of services like Afterpay, Klarna and Affirm has surged by 40% in the first two months of 2023, according to data from Adobe Analytics.
“The consumer is incredibly adept at finding ways to stretch their spending and, healthily or not, buy now, pay later has certainly provided that outlet,” said Simeon Siegel, an analyst with BMO Capital Markets in the earlier report. “It’s not the only way, but I think it has been the easiest way in recent years.”
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