A handful of business leaders that are offering raises in 2024 are doing so for only half of their workforce. Sometimes, it's less.
It's a tough reality given workers are facing persisting inflation and the highest borrowing rates in over two decades.
According to a recent survey from ResumeBuilder.com, 8% of leaders aren't planning to give raises next year, and another 18% are still undecided.
About 74% of business leaders surveyed said they would be offering raises next year. But, half of them said that 50% or fewer employees will receive a raise, according to the survey.
Among business leaders committed to providing raises in the new year, 82% plan to give performance-based raises and 55% will grant promotion-based raises. However, a huge chunk of business leaders, abut 69%, will offer raises in the form of a cost of living adjustment which experts argue isn't enough for employees amid the current economic environment.
ResumeBuilder.com Chief Career Advisor Stacie Haller stressed that cost of living adjustments aren't a raise either and should be more of a baseline.
In fact, those adjustments "may not even compensate for the loss of workers’ earning power due to inflation."
Employers should compensate an employee for performance or for a promotion on top of the cost of living adjustment, Haller added.
Jay McDonald, an executive advisor who had 40 years experience as a CEO, is in agreement, saying that the cost-of-living measures are much lower than actual living costs in the current economic environment.
"These measures do not fully consider food costs, energy costs, and general adjustments based on the local economy," he said.
The issue is that "when organizations fail to reward high performers and keep or tolerate weak ones, it imperils morale and workplace culture," according to McDonald.
Most times, employees will even leave a company, because they don't think their leaders care about them, McDonald noted.
Labor relations consultant Jason Greer cautioned that getting small or even no raises will be the norm "at least for the foreseeable future," because business are still playing catch-up with supply chain issues and dwindling resources.
"They are putting more stock in shoring up their business needs over adjusting employee pay," Greer, President of Greer Consulting, Inc., said, adding that companies are also "prioritizing executive compensation packages over what they could pay employees."