ASE Survey Reveals Decline in Wage Increase Budgets Amid Shifting Economic Conditions
Troy, MI – August 28, 2024 --- The survey analyzes
both present and anticipated trends in salary budgets, pay structure
modifications, and incentive-based compensation programs provided by employers.
The results indicate that the average effective Total Increase Budgets for the
year 2024 stood at 3.5 percent encompassing all categories of employees,
signifying a 0.6 percent decrease compared to the previous year. Notably, the
analysis reveals a robust decline in total increase budgets within the category
of Non-exempt, Hourly, Nonunion employees, with the projected increase reaching
3.6 percent in contrast to the 4.6 percent of the previous year.
As businesses navigate evolving challenges, a shroud of uncertainty envelops budget projections for the upcoming year, 2025. Specifically, the data shows that out of the 198 companies surveyed, roughly half (46%) of them have yet to actively discuss salary adjustment options for next year. This finding is four percentage points lower than last year’s result of 50%.
Highlights of the ASE 2024-2025 Salary Budget Survey include:
In the previous 12 months, 70% of employers made Market adjustments
to remain competitive in the market. This
market adjustment in compensation refers to an unscheduled change in an
employee's pay, made outside of the regular review cycle, often prompted by
factors like retention needs, market shifts, exceptional accomplishments, or
equity considerations. The survey results
suggest that most market adjustments were provided to specific individuals (75%)
or specific positions (49%).
= Average actual total increase budgets (i.e., any combination of merit, general or other increases)
for 2024 were:
o
3.6% (Non-exempt, Hourly, Nonunion)
o
3.4% (Non-exempt, Salaried)
o
3.7% (Exempt, Salaried)
o
3.4% (Officers/Executives)
= Average projected or planned total increase
budgets for 2025 are:
o
3.4% (Non-exempt, Hourly, Nonunion)
o
3.2% (Non-exempt, Salaried)
o
3.4% (Exempt, Salaried)
o
3.2% (Officers/Executives)
= The average pay increase percentage for top
performers in 2024 was 5%.
The survey results were announced by ASE President & CEO Mary E. Corrado, “Recent data shows a notable decline in the wage gains experienced post-pandemic, reflecting a cooling labor market and easing inflationary pressures. Employers are now adjusting their compensation strategies in response to a softening economic environment. As a result, wage growth expectations are becoming more moderate compared to the rapid adjustments seen in previous periods.”
The survey report is available free to all ASE members in
the ASE
Survey Library. Non-members can purchase upon request at kmarrs@aseonline.org.
Background information on the ASE 2024-2025 Salary Budget Survey:
198 organizations participated. Organizations with 1-100 employees
made up approximately 38% of the survey sample, while organizations with
between 101-499 employees represented nearly 47% of the sample. The remaining 15%
of the sample came from organizations with more than 500 employees. A variety of industries have been represented
in the survey, with durable goods manufacturing (44.4%) leading the pack.
Trades and services (17.7%) were the second-largest industry representation.
About ASE
ASE is employers trusted partner for Everything HR. ASE is a non-profit, membership organization – everything we do is based on the needs of members and to drive the success of their organizations and help them THRIVE. ASE strengthens organization's HR departments
by offering member benefits and discounted services that span the entire
employee lifecycle including recruitment, development, and retention while
minimizing compliance risk. We provide our members guidance through new
legislation and workplace issues. Learn more about ASE at www.aseonline.org.
