Record-High Pay Increases: Will It Continue in 2024? 📈

[Fit Small Business | ]( HR Insights from Our Experts In Partnership With: BREAKING NEWS: Pay increase budgets rose to a 20-year high this year, but 2024 will paint a slightly different picture for employers. Read on to learn more about the salary increase projections for the coming year.                 What to Expect in 2024   The pay increase budgets of U.S. companies rose to an average of 4.4% this year, the highest level since 2001. However, 2024 will see a [slight drop in salary increase budgets](, to an average of only 4.1%, according to a WorldatWork survey. Despite the 0.3 percentage point decrease, this is still higher than the average 3–3.5% pay increase budget that most U.S. companies followed in the past 20 years. A Mercer study even shows a [lower salary increase budget]( than the WorldatWork survey, with 2024 merit and total pay increases projected at averages of 3.5% and 3.9%, respectively. The rates are lower than this year’s planned budget of 3.8% for merit increases and 4.1% for total salary increases.         Do you know your employee cost? Employee cost can indicate overall company health. Do you know yours? Download our free employee cost calculator to find out.         Why the Dip in 2024 Salaries Increase Budgets?   There are various factors affecting payroll budgets and pay changes. For Payscale survey respondents who planned lower increases in 2024, many of them (77%) said that this is [due to the unusually high salary increases this year](. On the other hand, 44% of the respondents are worried about future economic conditions and business performance, which led them to plan lower pay hikes for next year. Another factor that can impact payroll budgets is the change in a company’s salary structure to attract and retain employees. If this is something you plan to do in 2024, we suggest partnering with an expert who can do a compensation market analysis for you. Or, you can use salary research tools, such as the ones in our [salary comparison guide](, to help you compare compensation data for similar roles at other companies. Knowing the prevailing salary rates and pay increase trends will help you prepare a payroll budget that will meet your expected labor costs for the year. If you’re new to this process or need tips, check out our article on [how to create a payroll budget](.     What’s new in HR? Check out some of our latest HR content:   [Top 5 Ways to Boost Employee Morale]( Maintaining good employee morale helps increase productivity and creates a positive work environment for your team. While there are many ways to do this, our guide explores five strategies you can use to improve your employees’ morale at work. [READ MORE]( [Leadership Training for Employees]( Growing employees to become good leaders will benefit the company in the long run because these well-trained individuals can help motivate and guide their staff to be more productive workers. In this guide, we cover 10 topics you should include in your training program for building effective leaders at work. [READ MORE](         Meet Fit Small Business’ HR & Payroll Experts   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [Heather Landau]( [Jennifer Soper]( [Robie Ann Ferrer](   [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( Want to Join Our HR Community? Check us out on LinkedIn! [-Jennifer Hartman, HR Staff Writer & Human Resources Expert]( [Juvy Vallescas]( [Genevieve Que](     Rethinking degree requirements for some of your open roles? Next week, we’ll break down everything you need to know so make sure you don’t miss it! Until next time, Heather Landau, Jennifer Soper, Robie Ann Ferrer, Juvy Vallescas, and Genevieve Que   For more quality resources on growing your small business: [Marketing]( | [Financing]( | [Accounting]( | [HR]( | [Retail]( | [Ecommerce]( | [Sales]( [Facebook]( [Twitter]( [LinkedIn]( [Alternate text] Want to change what you receive in your inbox? [Update Your Preferences]( [Image]   We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Our business model allows us to bring you the best answers to your questions, without editorial biases or cluttering the site with banner ads that everyone hates. 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