If you are among those who received a pay raise in the last year, consider yourself lucky. BambooHR’s latest annual compensation study paints a concerning picture for salaried employees in 2024.
According to the survey, 40% of workers didn’t receive a raise in the past year, and among those who did, the average increase was just 3.6%. This continues a sharp decline from 4.6% in 2023 and 6.2% in 2022, a 42% drop in average pay raises over two years.
Economic challenges are driving dissatisfaction, with 33% of employees unhappy with their pay, up from 23% last year, and half struggling to meet basic financial needs. Anita Grantham, Head of HR at BambooHR, warns that stagnant wages may push high-performing employees to seek opportunities elsewhere, especially as inflation and rising costs strain household budgets.
“When basic needs outside of work are put at risk, you’ll start to see employees lose focus on the job and even search for opportunities that can help them better stay afloat. While it’s not uncommon for savvy business leaders to cut costs in difficult economic times, that has to be weighed against the strain the business might experience if you lose high-performing employees due to stagnant wages,” said Anita Grantham, Head of HR at BambooHR.
Persistent pay gaps
Men received an average raise of 4.8%, nearly double the 2.7% increase for women. Additionally, 64% of men reported receiving a raise, compared to 55% of women. This trend is consistent with historical data showing men receiving larger increases over the past three years.
Disparities also extend to workplace roles. While 42% of VP and C-suite employees feel “extremely valued” by their companies, only 12% of individual contributors share that sentiment. More than half of employees believe their CEOs are overpaid, and 56% of individual contributors feel that senior leaders lack awareness of typical worker struggles.
Generational differences also shape attitudes toward pay. While receiving lower raises, Gen Z workers report the highest satisfaction (79%), while Millennials are the most likely to seek new jobs (62%). Compensation-related stress is highest among younger workers, with 45% of Gen Z and 44% of Millennials linking pay issues to mental health impacts.