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“In our experience, strict mandates tend to be viewed less favorably by employees, as opposed to setting expectations and guidelines that allow for some flexibility and choice for employees — in other words, freedom within a framework,” said Lauren Mason, senior principal, career, at Mercer.

Lauren Mason, senior principal, career, at Mercer, said the projected decrease in salary budgets from 2023, which saw salary increase budgets average 4.4% , is likely a combination of economic uncertainty and labor market softening.

Trendspotting While pay growth remains strong for most organizations in the upcoming year, it is starting to slow down, according to Lauren Mason, senior principal, career, at Mercer.

“We see in our research and work with clients that labor shortages have been the key driver of heightened merit increases, not inflation,” said Lauren Mason, senior principal, career at Mercer.

“The survey indicates that employers are continuing to invest in compensation to combat prolonged tight labor markets, but they are doing this with more prudence than what we saw in 2022,” said Lauren Mason, senior principal in Mercer’s career practice.