Inflation worries means raises will continue, report finds

The high demand for workers and ongoing worries about inflation means that a strong majority of employers will keep next year’s salary increases similar to this year, with data showing pay increases at 4% on average for 2023, according to a new report from Payscale.

Payscale found that 78% of organizations in the U.S. and 81% in Canada say they’ve set their salary increase budget the same or higher for 2024. Payscale’s prediction for 2023 was originally a 3.8% increase in average wages in the U.S. for this year, but a resilient economy may have resulted in more competition for wages.

The compensation data company said that the market is beginning to cool a bit, noting that unemployment increased, and inflation dropped in the first half of this year. In addition, its survey of more than 1,700 employers found that the percentage of organizations expecting to lower their salary increase budget went from 9% for 2023 to 22% for 2024.