Will Pay Increases Exceed Inflation In 2024?

Effective leaders work to avoid driving up fixed pay costs by focusing on employee experience as well as benefits flexibility and access.

Even as inflation slows at the end of 2023, planned salary increases for 2024 remain higher than average over the past 20 years. Employers continue to cite inflationary pressures and concerns over a tight labor market as the primary influencing factors behind salary increase budgets.

In April 2022, I covered why – despite severe talent shortages and the ongoing impact of the Great Resignation – corporate salary increase budgets trailed inflation and why salary increases move differently from inflation. A year later, in mid-2023, salary increases continued to move differently than inflation under changing economic conditions, with salary increases potentially again exceeding inflation for the first time since 2020 (and in a manner keeping with most years of the past two decades).