Employers budget less for pay raises, plan fewer promotions in 2024: Report

San Francisco: While layoffs in the global tech industry continue unabated, employers in the US are planning to budget less for salary raises next year, according to a new report.

According to recent data from consulting firm Mercer, employers are planning to allocate 3.5 per cent of their compensation budgets to performance-based merit raises in 2024 -- down from 3.8 per cent for 2023, reports HR Brew.

Businesses are also planning to promote a smaller share of their workforce next year -- 8.7 per cent of their employee population compared to 10.3 per cent last year, the report noted.

“The cooling of compensation budgets is tied to the cooling of the labour market," Lauren Mason, a senior principal in Mercer’s career practice, was quoted as saying.

Almost one-half of employers surveyed said they were planning to revisit their total rewards strategy, “in the interest of attracting talent and improving retention”.

Flexibility, manageable workloads, and time off “are areas that are highly valued by employees,” Mason said.

Tech companies, including startups, around the world have fired more than 400,000 employees in the last two years, with more than 30,000 employees being sacked in India by over 110 Indian startups in the same time period.

Big Tech firms and startups across the spectrum have fired employees, and layoffs continue to happen.

On average, about 555 employees lost their jobs every day in the last two years - or 23 workers every hour.

In January alone, 89,554 employees were laid off.

As 2023 is not over yet, more layoffs are set to happen in the remaining period.