Great Lakes Wire

ASE recently released its 2024-2025 Salary Budget Survey, offering a comprehensive view of salary trends, pay structure adjustments, and incentive-based compensation programs among employers. This data provides key insights into the challenges businesses face in an uncertain economic environment.

For 2024, the average total increase budgets for employee wages across all categories stood at 3.5%, reflecting a slowdown in wage growth. This represents a 0.6% decline from the previous year, with notable decreases in non-exempt hourly and nonunion employees’ wage increases, which dropped from 4.6% to 3.6%. This downward trend suggests that businesses are exercising caution in light of a slowing economy.

Some evidence of this caution is seen in the number of firms that have yet to formally budget for 2025 increases. In fact, the survey reveals that nearly half of those surveyed (46% of the 198 companies) have not yet begun planning salary adjustments for 2025. Companies are hesitant to make firm budgetary decisions due to fluctuating economic indicators, such as a softening labor market and a decline in overall economic activity.

Average actual total increase budgets for 2024, broken down by category, were:

- 3.6% – Non-exempt Hourly Nonunion Employees

- 3.4% – Non-exempt Salaried Employees

- 3.7% – Exempt Salaried Employees

- 3.4% – Officers/Executives

Projections for 2025 indicate slight reductions in wage growth compared to previous years across most categories. However, top performers remain a priority, receiving an average increase of 5% in 2024, underscoring employers’ commitment to rewarding high achievers despite economic challenges.

Despite the declines in budget projections, the data still suggest that market competitiveness is still top of mind for some organizations. The data revealed that "70% of employers made unscheduled market adjustments to compensation packages to stay competitive." These changes, often driven by employee retention needs or exceptional performance, were targeted at specific individuals (75%) or positions (49%), signaling a more individualized approach to compensation in response to tightening talent markets.

As businesses navigate this evolving landscape, it’s clear that market competitiveness and strategic planning will continue to be central to compensation strategies.

The survey report is available free to all ASE members in the ASE Survey Library. Non-members can purchase upon request at kmarrs@aseonline.org.

By Emily Price, courtesy of SBAM-approved partner, ASE.

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