In August, ResumeTemplates.com surveyed 1,000 business leaders to understand how economic pressures and a tight labor market are impacting salaries and benefits within their companies.
Study highlights:
- 27% of companies have reduced current employees’ salaries
- 51% of companies have cut benefits
- 1 in 10 companies aren’t giving raises to any employees this year
- 1 in 5 companies won’t offer all employees cost-of-living adjustments
3 in 10 Companies Have Reduced Salaries of Current Employees
Nearly three in 10 (27%) of companies report that they have reduced current employees’ salaries.
More specifically, 5% of companies say they have reduced the salaries of all their employees, 5% have for most employees, 7% for some, and 9% for a few. In contrast, 71% of companies report having not reduced any salaries, while 2% of respondents say they are unsure.
For companies that reduced some but not all workers’ salaries, the primary reason cited was employee performance (58%). Budget constraints of certain departments (51%) and the strategic importance of the role (51%) were also significant factors. Market competitiveness for specific positions and seniority or tenure were each mentioned by 35% of respondents, while 34% considered historical salary levels too high for some roles.
Half of Companies Have Cut Benefits
The most common changes to employee benefits include reduced paid time off (PTO)/vacation days (23%), decreased or removed stock options/equity grants (21%), and reduced or eliminated meal allowances (20%).
Additionally, companies have reduced or stopped 401k matching (19%), employee wellness programs (19%), health care benefits (16%), and parental leave benefits (15%).
1 in 5 Companies Won’t Give Cost-Of-Living Adjustments to Employees
Overall, 9% of companies will not give raises to any current employees, while 77% of companies say they plan to give or have already given raises this year, and 15% are unsure.
However, 21% of companies say they will not provide a cost-of-living adjustment to all employees, while 65% indicate that they will, and 15% are not sure.
“If companies keep cutting salaries, reducing benefits, and denying salary increases to current employees, they are going to lose talent. They will also create a culture of mediocrity. People will go above and beyond if they’re appreciated and compensated, but if they aren’t, they will pull back on productivity,” says ResumeTemplates’ Chief Career Strategist Julia Toothacre.
“Unfortunately, when organizations inevitably lose employees, many will blame their inability to obtain and retain talent on entitlement or a talent shortage. There are a lot of talented professionals out there right now, but workers want to be compensated for the level of experience and value they bring to an organization.”
The survey was conducted in August 2024. In total, 1,000 U.S. business leaders were surveyed.
To take the survey, respondents had to be over 25 years old, have a household income of at least $75,000, an education level above high school, and currently work at a company with more than 10 employees. Respondents also had to be in one of the following organizational roles: owner, partner, president/CEO/chairperson, C-level executive, chief financial officer, chief technology officer, senior management, director, or human resources manager.
Also, respondents had to pass through a screening question ensuring they were knowledgeable about their company’s current hiring efforts.
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