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News Brief: Employers Plan to Raise Wages 3.9% in 2025

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News Brief: Employers Plan to Raise Wages 3.9% in 2025
2:27

In the constantly evolving landscape of employee compensation, understanding salary trends is crucial for employers to remain competitive and retain talent. The latest Salary Budget Planning Report from Willis Towers Watson (WTW) provides valuable insights into projected wage increases for the coming years.

Summary of the Report

The latest Salary Budget Planning Report released by Willis Towers Watson (WTW) indicates that salary budget increases are expected to rise by 3.9% in 2025. The overall median pay raise for 2024 has dropped to 4.1%, compared to 4.5% in 2023. Although these expected wage increases have diminished since 2023, this figure remains high compared to many previous pay cycles, where a 3% increase was common.

WTW’s report collected responses from 32,000 companies across 168 countries worldwide, including 1,888 U.S. organizations.

Key Findings

  • Almost half (47%) of U.S. organizations reported that their salary budgets for the 2024 cycle are lower than in 2023.
  • Total annual payroll expenses, including salaries, bonuses, variable pay, and benefit costs, continue to rise considerably in the United States. Nearly three-quarters (73%) of companies report that their payroll expenses are higher than last year.
  • Nearly half (49%) of companies hire people with higher salaries.

Employer Takeaway

This report suggests that employers will continue increasing wages to keep up with inflation and remain competitive in the labor market. Although the high rate of employee resignations and turnover seen in recent years has subsided, compensation remains a critical factor for attracting and retaining workers. Organizations should expect wage increases to remain high for the foreseeable future.

Conclusion

As wage dynamics continue to shift, employers must stay informed about salary budget trends and payroll expenses. Monitoring inflation, industry trends, and the labor market will be key to making strategic compensation decisions.

For more information on employee retention strategies, contact us today at 909.466.7876 and speak with a live representative.

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