Beyond Salaries: Unveiling Compensation Trends Amidst Rising Employee Dissatisfaction in 2024
As employee dissatisfaction with compensation grows, employers face the challenge of retaining top talent amidst economic uncertainties.
Here’s a comprehensive guide on what employers can do to navigate this issue and foster a workplace environment that prioritizes employee satisfaction:
Salary Increase Projections. Salary increase budgets in 2023 were the highest they’ve been across the world in the last 20 years, according to SHRM, and US employers plan to raise 2024 compensation budgets in a similarly aggressive manner, albeit slightly less so compared to 2023. The Biden administration has formally announced an average 5.2% pay raise for federal employees, the largest in 40 years. Competitive pay is likely to be necessary in 2024 to keep up with a tight labor market as well as financial pressures caused by inflation.
Pay Transparency. Efforts to legally require employers to disclose salary information are well underway in many states (or have already been in place for years) in order to increase workplace transparency and equitability. California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, New York, Rhode Island, and Washington require some form of pay transparency, and states considering similar legislation include Alaska, the District of Columbia, Kentucky, and many more. Some local jurisdictions have their own pay transparency legislation, such as Jersey City and New York City. Compliance with pay transparency is not only required but also a key aspect of building workplace equitability to attract workers and to improve trust and retention with existing employees.
In fact, experts predict that the degree of pay transparency requirements is likely to increase to require employers to regularly communicate with employees about their pay range. Employers in Rhode Island, for instance, must provide the salary range if asked by an employee. Research suggests that employees gravitate towards areas with job postings that have narrow pay ranges.
Financial Health Offerings. Inflation, unfrozen student loan payments, and all-time low employee financial health reports in 2023 point to high worker financial stress in 2024. Experts predict that financial health offerings (e.g., financial budgeting education, debt repayment tools, emergency savings help) will be a larger priority for employers as they understand the need among workers for better short-term financial security.
Hybrid Work Models Impacting Compensation. The widespread adoption of hybrid work models is reshaping how organizations approach compensation. Remote work options are no longer just a perk but a standard expectation. To remain attractive to potential hires, companies are adjusting compensation packages to accommodate the flexibility offered by hybrid work setups.
Focus on Employee Well-being. Compensation is extending beyond traditional salary figures. Companies are placing a stronger emphasis on employee well-being by incorporating benefits like mental health support, wellness programs, and flexible scheduling. In 2024, a holistic approach to compensation is seen as a key driver for employee satisfaction and retention.
These compensation trends are just a few ways businesses are planning on keeping engagement within the workplace. In navigating the landscape of employee dissatisfaction, employers can proactively implement these strategies to create a workplace that values and prioritizes the well-being of its workforce.
Source: SHRM
