Something to readCompensation
Employers Budgeting 4.1% Pay Raises in 2024
A 3-minute report from 2023 on how US employers set their raise budgets for 2024
Why it’s worth your time
WorldatWork's short 2023 report shows the step behind a raise that happens long before any review: the budget. A compensation association surveyed more than 2,000 employers about how they planned raise money for 2024, and the report sets out the pieces that budget is made of.
How companies set raise budgets
The essay · 3 min · Free
How to get it
Opens their site. We don’t copy it here; we’d rather they get the read.
- Read the report.
Look for the split between merit and general or cost-of-living increases, and the section on how organizations pay for promotions. The figures for other countries near the end are optional.
- Ask when your raise budget gets set.
In your next 1:1, ask your manager two process questions: when in the year the company sets its pay increase budget, and whether promotions have their own budget. Write the answers down for next year.
You“I'd like to understand how pay increases work here. When does the company set the budget for raises, and do promotions come out of the same pot or a separate one?”
Good moments for this: before next year's budgets are setafter a raise that felt fixed in advance
Keep going with Truest
Small actions add up. Truest helps you find the next thing worth doing, make the space to do it, and keep a record of your progress. It’s a private place to work on your career, and it’s yours, not your employer’s.
- It actually happensDo it now, and you’ve invested in your career today.
- Kept with the thing it was aboutSave what comes back in your Vault, next to the work it was about.
- It’s yours to keepEach thing you do is saved to your private record, there when your next review or job search comes around.
Anything else we can help you with this week?
Making it work for you
Every workplace is different. Here’s what to think about before you start, and what might get in the way.
Things to think about
Once the budget is set, a bigger raise for one person can mean smaller ones for others on the same team, which is part of why managers can seem cautious about promises. One common way to divide the pool is a merit matrix, a grid that sets a raise range by your rating and by where your pay sits in its band, so equal ratings can still bring different raises. With a pool and a grid in play, a question about how the process works can be easier for a manager to answer than one about an amount.
Questions people ask
What is Employers Budgeting 4.1% Pay Raises in 2024 about?
A 2023 Workspan Daily report by Brett Christie on WorldatWork's salary budget survey, which drew answers from 2,146 organizations. It found US employers projecting average salary increase budgets of 4.1 percent for 2024, explains the merit and cost-of-living split, and covers how promotions are funded.
What is a merit increase budget?
The part of a company's raise money set aside for pay increases tied to performance, as opposed to general or cost-of-living increases. The report found US employers planning merit budgets averaging 3.6 percent for 2024.
How often do companies give raises?
The report puts the average time between pay increases at or a little under twelve months, the historical average, in every country the survey covered. When your company sets its raise budget, and when increases take effect, is something your manager or HR can tell you.
What it says, and how it holds up
The report is a short news write-up of a survey by WorldatWork, a US association for compensation and benefits professionals, and it's written for the people who set pay. It reports US employers projecting raise budgets of 4.1 percent on average for 2024, after budgets for 2023 came in at 4.4 percent, above the 4.1 percent employers had projected for that year. A raise starts as a budget, with merit and cost-of-living increases as separate slices of it. Promotions are less tidy: 55 percent of the organizations budgeted for them, and among those that didn't, most paid for promotion increases out of savings from vacant roles or other sources. Liz Supinski of WorldatWork adds that some companies skip a promotion budget on purpose, worried that managers will promote people because the money is there.
Read the numbers as a record of 2023, a tight labor market in which budgets had just run above plan; the percentages in any later year will differ, and the headline figures are for US employers, though the survey covered 18 countries. The structure tends to last longer than the figures. In a year when your company has frozen pay or is cutting costs, the survey's averages say little about you, and it may help first to find out whether there's a raise pool at all this cycle. The report frames the budgets around staying competitive in the labor market, and a budget is set across the whole company, which is part of why a modest raise isn't necessarily a judgment on you. This explains how things usually work; it isn't financial, tax or legal advice for your situation.
You might like
More in Compensation
See allRead this alongside your role page
Tell Truest what you’re dealing with
We read every one, and we write guides for the things that come up most. Leave your email if you’d like to hear when we do.
Picked by Truest and described in our own words. The original belongs to its creator. Last updated October 9, 2026. We sell a career membership; where that’s relevant above, we say so.