Take note, budget planners

What’s behind the drop in increases? Lower inflation and higher unemployment could be the cause, although the survey does not provide definitive answers.

“Last year we saw that salary increases could peak, even if 4% becomes the norm. Although 4% remained the median in 2024, deeper analysis suggests a shift is occurring,” said Andy Miller, vice president of compensation consulting at Salary.com. “This is important for HR and compensation teams as they plan their budgets for next year, taking into account factors such as industry, location and work arrangements. »

A sluggish job market This means employers are less worried about workers leaving for greener pastures.

Additionally, executives likely continue to invest in AI advancements, which could further diminish their interest in increasing the cost of their human workers. At least entry-level AI jobs remain an option for those hoping to enter the job market during this downturn.