Merit Pay Increase Trends for 2024

"Merit increases have generally plateaued, averaging just under four percent, as employers balance retention imperatives with margin constraints. However, compensation for security and risk management roles continues to outpace the general labor market, underscoring both the critical nature of these functions and the persistent scarcity of qualified professionals. The security labor market has become increasingly differentiated. Compensation levels are now heavily influenced by technical depth, sector specialization, and proficiency with emerging technologies such as artificial intelligence, cloud security, and data governance. Organizations are offering premium pay for roles tied to data protection, threat intelligence, and AI security assurance - positions that have grown sharply in demand as digital ecosystems expand and attack surfaces multiply. The competitive market for these roles has led to a rise in variable compensation opportunities, long-term incentive eligibility, and differentiated total rewards strategies aimed at retaining top talent. At the same time, organizations are reevaluating their workforce structures and skill pipelines to manage persistent capacity gaps. The #convergence of cybersecurity, compliance, and data privacy responsibilities has created cross-functional expectations for many professionals, elevating the importance of strategic and analytical skill sets. Remote and hybrid work models have further expanded the available talent pool, but they have also intensified pay competition across geographies as employers recruit nationally and globally for high-demand expertise. From a market perspective, security compensation in 2025 reflects more than pay growth - it signals the strategic repositioning of the function itself. Security has evolved from an operational safeguard to a business enabler, integral to digital transformation, regulatory compliance, and enterprise resilience. The resulting compensation dynamics mirror this elevation: pay structures increasingly reward #BusinessAcumen, adaptability, and the ability to manage complex digital ecosystems alongside technical mastery. As organizations confront rising cyber risks and the growing economic cost of data compromise, investment in human capital - particularly in advanced security roles - remains one of the most visible indicators of corporate commitment to long-term stability and trust." #Prescient #Cybersecurity #CorporateSecurity #CyberJobs #SecurityJobs #CISO #CSO #CEO #Legal

Salary Increase Budgets Remain Elevated: Long-Term Impact on Inflation For several decades, The Conference Board (TCB) has been conducting surveys of salary increase budgets in corporate America. These budgets serve as a reliable proxy for the average annual raises employees receive. In recent decades, average salary increases have been on a gradual decline, hovering around or below 3% in the decade leading up to the pandemic. However, the labor shortage during the pandemic caused a significant rise in this metric, with salary increase budgets jumping to 4.4% in 2023. A key question has been whether these average raises would return to pre-pandemic levels or remain elevated. Last week, TCB released its 2024 survey results, indicating that salary increase budgets remain higher than pre-pandemic norms. Employers reported planned salary increase budgets of 3.9% for 2025, down slightly from the 4.4% actual increases in 2023 but slightly higher than the 3.8% actual increase for 2024. This sustained elevation suggests that the wage growth seen during the pandemic may have more lasting effects than initially anticipated. The persistence of higher salary increase budgets could contribute to ongoing inflationary pressures, making it more challenging to achieve the Federal Reserve’s 2% inflation target. https://lnkd.in/gT7KNudg #labormarkets #wages #compensation #inflation #federalreserve #recruitment #hr

You’ve got 4%. Now what? That’s the salary increase budget you're working with for this fiscal year. Not 5%, not 6% just 4%. And you’re being asked to use it to reward performance, retain top talent, stay market competitive, fix pay inequities, and support internal mobility. Sound familiar? Here’s a strategic way to allocate that 4% budget across four essential priorities: 1. Merit & Performance (~60% of the total 4% budget or 2.4%) Performance still matters, but the days of providing the same salary increase to all employees is behind us especially if you have a pay for performance philosophy. Tight budgets demand sharper differentiation. High performers should see meaningful increases. Use a merit matrix that includes the performance rating to ensure the highest performing talent feels the recognition. 2. Market Adjustments & Pay Equity Corrections (~25% of total 4% budget or 1%) Data-driven decisions and analysis are essential here. Use them to identify jobs or employees that are underpaid relative to market or similarly situated peers, especially in high-demand roles or historically underrepresented groups. 3. Promotions & Reclassifications (~10% of the total 4% budget or 0.4%) Use this to fund promotional increases and grade reclassifications. Promotions shouldn’t cannibalize your merit budget. Make sure they’re meaningful pay increases to recognize significant job responsibility changes. 4. Critical Retention Reserve (~5% of the total 4% budget or 0.2%) Set aside an “emergency reserve” for off-cycle adjustments. These are your just-in-time retention tools for flight risks, counter offers, or mission-critical roles where losing talent would be costly. Use sparingly but strategically. Why it matters: Without intention, budgets get used up quickly and by the end of the fiscal year there is nothing left to spend on critical talent. Allocating your 4% with purpose ensures alignment to business goals and talent needs. It also helps you communicate more clearly with leaders about how the overall budget is aligned to the various reasons for pay changes throughout the year. Build in budget reviews quarterly. Your compensation decisions should be agile especially in today’s labor market. How are you allocating your salary increase budgets this year? #Compensation #TotalRewards #PayEquity #HR #HumanResources #MeritPay #Retention #InternalMobility #CompensationPlanning #WorldatWork #SHRM #CompensationConsultant #FairPay