The average salary increase was just 3.9% across 2024, according to a new survey from Salary.com.
That’s down from the 4.3% increase that constituted the average a year earlier, so it indicates a slight decline in salary growth.
The drop affects companies that offer both small and large salary increases, too, according to the new report. The trend is expected to continue into 2025, as well.
The New Normal… Same as the Old Normal?
The survey, which collected responses from over 1,000 HR professionals in the US and Canada, found that fewer companies were offering high raises.
The amount of companies offering high raises (specifically, those between 5% and 6.9%) fell from 25% in 2023 to just 14% this year.
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Instead, companies are returning to typical salary increases of 3% to 3.9%, with a large 38% of respondents in 2024 staying within this range. That’s a notable uptick from just 25% of companies that offered the same in 2023.
The Biggest Increases Are in Education, Construction
Other interesting takeaways from the survey include some stats focused on the impact of geographic areas and different industries on the sizes of people’s raises.
- The Northeast U.S. had the lowest salary increases, averaging 3.6%, while the West Coast had the highest, with more expensive cites standing out, like San Francisco (4%) and Seattle (4.3%).
- New York City only had 3.7% increases, down from the national average of 3.9% — as if living in the Big Apple wasn’t expensive enough.
- Industry-wise, the Education, Government & Non-Profit sector saw the largest increases, with 4.3% raises on average. Construction (4.2%) wasn’t far behind them.
- The lowest raise averages for industries? Hospitality (3.4%) and Transportation (3.6%).
Take Note, Budget Planners
What’s behind the slumping raises? Lower inflation and more unemployment could be responsible, although the survey doesn’t have any hard answers.
“Last year, we noted that salary increases might be at a peak, even with 4 percent becoming the norm. While 4 percent remained the median in 2024, further analysis suggests a shift is happening,” said Andy Miller, Vice President, Compensation Consulting at Salary.com. “This is important for HR and compensation teams as they plan budgets for next year, considering factors like industry, location and work arrangements.”
A gloomy job market means employers are less worried about workers leaving for greener pastures.
Plus, executives are likely still invested in AI advances, which may be further lowering their interest in hiking the cost of their human workers. At least entry-level AI jobs are still an option for those hoping to enter the job market during this slowdown.
