Over the past few years, employees have been empowered due to low unemployment levels and lackluster workforce participation rates. Essentially, professionals had leverage, allowing them to secure raises with ease or, if that failed, quit and find a new position with a higher salary.
Today, that landscape is changing. Workforce participation is on the rise, making the environment more competitive. That means, instead of dealing with the Great Resignation, we’re entering a period known as Big Stay, a time when employees are less likely to seek out opportunities elsewhere.
Overall, this is positive news for employers, as it signals a slowing of wage growth. However, that doesn’t mean companies shouldn’t prepare to meet wage expectations during the coming year. If you want to ensure your organization is positioned for financial success in 2024, here’s what you need to know.
Current Wage Increase Projections for 2024
Even though the market is shifting in favor of employers, most companies are incorporating raises into their budgets. While estimates on how large those increases are varied, most studies show organizations are planning raises of about 3.9 percent, which is slightly lower than 2023 levels.
Generally, those projections align with an existing downward trend in wage growth. While salaries are on the rise, current raise amounts are far lower than they were in 2022. This is a reflection of changing conditions in the broader job market, including less movement and more workforce participation, both of which heighten competition for open jobs.
Additionally, while inflation is present, the rate is dramatically lower than in recent years. Since costs aren’t rising as quickly, wage expectations are more metered. Still, wage increases over the past few years didn’t keep pace with inflation, which is why some wage growth is still expected.
Navigating Wage Expectations in 2024
For companies, navigating wage expectations during the coming year is a multi-faceted process. In most cases, it’s best to financially prepare to at least meet the average increase in your area, which is likely a figure around 3.9 percent. By assuming that’s the minimum you’ll need to offer to remain competitive, it’s far easier to avoid turnover related to subpar salaries.
However, aiming slightly above the average can work in employers’ favor. Outpacing the competition can position a company as an employer of choice, easing retention and boosting recruitment. Even though the job market isn’t dramatically favoring candidates today, some skills are still hard to secure. By providing higher wages, it’s far easier to attract critical talent. In turn, organizations that do are empowered to meet their various goals, often leading to more profitability.
For companies concerned about costs, another option is to use a variety of hiring options to maintain agility. By partnering with a staffing firm, you can access a variety of flexible and customizable programs designed to meet your unique needs.
If you’d like support from a leading staffing agency, TempStaff wants to hear from you. Contact us to learn more about our customizable hiring programs today.
