1srelluc
Diamond Member
Employers trim raises, bonuses | LinkedIn
As companies look to cut costs — and employees lose the upper hand they've had with management in recent years — pay raises and bonuses are shrinking.
www.linkedin.com
As employers look to cut costs — and employees lose the upper hand they've had with management in recent years — pay raises and bonuses are shrinking, writes The Wall Street Journal.
Nearly half of the 1,900 US companies polled by WTW in the second quarter cut budgets for salary increases. The median raise this year was 4.1%, down from 4.5% in 2023, and is expected to drop to 3.9% in 2025. In a slowing job market, workers are also less likely to see pay bumps when switching jobs, and are more likely to stay in jobs where raises and bonuses are smaller than expected.
WSJ (paywall)
The era of hefty pay increases is over, and companies are already making plans to trim raises again next year.
The shrinking raises are the latest sign alongside last week's lackluster jobs report that workers have lost much of the leverage they've had with bosses in the past few years. With hiring now slowing sharply, employers are controlling payroll costs by cutting or freezing bonuses, doling out fewer and smaller merit increases, business leaders and compensation consultants say.
Some companies are also trying to fill roles as they open in lower-cost cities, paying smaller salaries than what the previous person was making.
Meanwhile, fewer workers are getting pay bumps from switching jobs than they did late last year, new data show.
Among 1,900 U.S. companies polled in the second quarter, nearly half said they had downsized their budgets for salary increases this year. That has lowered the median raise to 4.1% this year from 4.5% in 2023. They plan to spend even less next year, projecting a median raise of 3.9% in 2025, according to employer-advisory firm WTW, which conducted the survey.
Ellen Teeter, 23 years old, said she'd hoped for more than the 1.5% raise she received this year.
"I was underwhelmed," said the bank operations analyst in Charlotte, N.C.
When she joined her company a year ago, she received a 10% signing bonus and was told this year's raises would range from none at all to 10%. She wasn't the only one with an increase on the low end. Most co-workers she spoke with also received between 1% and 2%, and one received 4%.
For now the disappointing raise isn't enough to leave, Teeter said, since she expects to be able to move to a higher-level position in the next year. If she doesn't, she'll start looking for other jobs: "I'd like to make more money and do more work that matters."
Private employers absolutely can not keep up with inflation with labor costs, and yes, you read that right, which is concerning in itself.
Employers are already pricing themselves out of the market to stay afloat and nearly profitable. Outside of .gov mandated or .gov contracts, this COL increase are not sustainable for small businesses.
LOL....In before the "I got a 6% raise and a 10% bonus" crowd.....Mostly leftists.
