While wage growth may be slowing and other economic indicators suggest the job market is loosening, 2024 wages are still anticipated to increase by 4.1% (i.e., still higher than pre-pandemic rates). Also top of mind for business is a projected increase in employers’ health care costs in 2024. This creates tension with worker expectations, as studies indicate a notable jump in annual expected salary from years past.
In some industries, pay issues play out on a national stage. For instance, the recently concluded United Auto Worker strikes, which largely took place over several weeks in various plants in Detroit (including a Ram truck facility), resulted from a breakdown of pay and other union negotiations. Initial demands were for a 40% increase in pay (over four years) and a reduced workweek, and the details known of the tentative agreements reflect a sizeable increase.
Business Takeaway: As is often the case, talent attraction and retention may be a tricky balance for businesses. For many years, businesses have focused on non-compensation perks and benefits, yet pay seems to be more top of mind for many workers than in recent years past. What benefits are prioritized in your industry, and what payment trends have you observed?