Inflationary pay rises fall short
- 81% of US professionals seeking a new job with ‘better pay’ this year, above inflation
- Majority of professional services firms offering 3.5-4% pay increases, just in-line with inflation
- Two thirds of managers admit that pay rises have been awarded to support with cost-of-living
- Professionals moving to a new company can secure a 15% increase, for the same role that they currently do
81% of professionals in US have stated that they will be seeking a new role this year – with the leading reason being for better pay.
While more than half of professional service firms plan to boost their salaries in 2024, the average increase is only 3.5-4% - barely enough to keep up with inflation or the rising cost of living.
It is not surprising therefore to see that the leading reason for pay rises (according to managers) has been to support employees with cost of living (67%). This is followed by salary increases; to aid morale and retention (17%), and for a promotion, time served, or targets being met (17%).
The findings come from global recruitment consultancy Robert Walters annual Salary Survey Guide 2024 – which tracks salary predictions for the coming year, as well as surveying 4,000 white collar professionals and 2,000 employers to identify upcoming workplace trends.
Mae Mendoza, Senior Manager - Head of Robert Walters Austin comments:
“Historically pay rises have been used as a metric to reward hard work, loyalty, or progression. However, what this survey reveals is how truly unique the market continues to be - where pay rises are now being awarded out of necessity by employers who are fearful of not appearing as a responsible or ethical employer.”
Professionals looking elsewhere for competitive compensation
The 2024 salary guide highlights a pressing concern: the average pay increase of 3.5-4% barely edges past the latest inflation rate of 3.1%. These findings underline a stark reality—despite pay rises, employees won't significantly improve their financial standing by sticking it out in their current roles. As a result, the most viable path to securing a higher salary in the upcoming year for many involves switching jobs.
The Robert Walters Salary Survey reveals that on average a professional can secure a 10-15% pay increase for the same job role in a different company – with this increasing to as much as 20% for in-demand roles or scarce talent.
Mae adds:
“Our internal data and research show that professionals who switch organizations often experience a substantial salary increase. For instance, in 2023, finance & operations professionals saw an average salary rise of 18.5% when moving to new companies.
“Combining this data with the fact that two thirds of professionals (63%) prioritize compensation over anything else - including career growth, a change in profession, or even conflicts with management - we can expect to see an imminent shift in the job market in the new year.”
A staggering 93% of employees expressed openness to leaving their current organization for a salary increase of 10% or more. The primary factor for staying in their current role is based on competitive compensation - just a small fraction (9%) cited their appreciation of the company as the key reasons for staying.
Companies compensating with benefits
1 in 3 employers have admitted to being ‘concerned’ about losing primary staff who have received below inflationary pay increases, with over half expecting a dip in morale or productivity if compensation is not enough.
However, employers shouldn't overlook their ability to compete for talent. To help counter the concerns, many employers have increased investment back into workplace culture, the office interior and benefits.
The Robert Walters Market Intelligence Team have identified that on average employers are spending around 20-30% of an employee’s total salary on benefits. Wellbeing remains a top priority, with 46% of professionals willing to stick to a lower-paying job if it offers a better workplace culture, rather than switching jobs solely for better pay.
Top benefit perks include:
- Private Health Insurance
- Flexi/remote working
- Bonus Scheme
- Extended holidays/sabbaticals
- Life/critical illness cover
- Medical & Mental Health Assessments
- Equity/company stocks/shares
- Company car/allowance
- Travel/commuting subsidiaries
- Sociable culture
- Travel insurance
- Gym membership
- Childcare/childcare vouchers
Click here to download a copy of the 2024 Robert Walters Salary Survey Guide.
