Uncertainty is causing companies to exercise increased caution in shaping their personnel policies, closely observing wage trends. They are often confronted with the challenge of optimizing labor costs in a way that does not limit their ability to attract and retain talent in the organization. It is therefore not surprising that companies’ wage increase plans for the coming months are less ambitious than a year ago. A study by Hays Poland shows that as many as 81% of employers intend to increase salaries, but only one in five will offer pay rises exceeding 10%.
The analysis of wage trends shows that the highest pay raises are already behind us. According to the study described in the Hays 2024 Wage Report, 81% of companies included wage increases in their strategy for the 2024 year. However, only 18% anticipate pay rises of 10-20%, and a mere 1% exceed the 20% mark. Most organizations, 63%, plan to increase wages by less than 10%.
By comparison, in 2023, wage increases exceeding 10% were declared by as many as 31% of companies participating in the Hays study. As recruitment experts note, this trend is understandable in the context of declining inflation and the economic uncertainty in which organizations have to operate.
Source: 2023 Wage Report and 2024 Wage Report, Hays Poland
“The rising costs of doing business have realistically limited the capabilities of companies in terms of wage changes. This year, employers will have to look for solutions that will allow them to secure the necessary skills in the company and at the same time will be adapted to the current challenges of the organization, for example, the implemented savings plans and the rising costs of running the business. Hence, higher pay rises will most likely be reserved mainly for the most valuable employees, who possess the most difficult to acquire skills,” emphasizes Agnieszka Kolenda, Executive Director at Hays Poland.
PLANS VS REALITY
At the same time, an analysis of the results of the Hays study shows that original wage plans often undergo modifications at a later date. 71% of employers planned to increase wages in 2023, but ultimately 83% of organizations decided to take this step. Therefore, by the end of this year, we can expect a similar result.
“Although there is more uncertainty in the market at the beginning of 2024 than a year ago, the professional prospects for specialists and managers remain positive. Specialists are aware that expert knowledge, experience, and skills are valued, so their expectations do not decrease or decrease only slightly. Many of them are waiting for an attractive job offer that will meet their precise expectations. There is therefore a probability that the cautious wage increase plans of companies will again be verified and updated over the course of the year,” predicts Alex Shteingardt, Managing Director at Hays Poland.
HOW STRONG WILL WAGE PRESSURE BE IN 2024?
The Hays study shows that in the past year, a wage increase was obtained by 67% of specialists. Most often, the increase did not exceed 10% and resulted from standard, annual salary evaluations in the company or a change of job. In the face of still high inflation, it is not surprising that only 49% of respondents express satisfaction with the received remuneration.
Even though employees are not lowering their wage expectations, they are aware that it may be harder to get a raise in 2024. Most respondents expect their salary to increase, but the overwhelming majority expects a raise of less than 10%. Meanwhile, as many as 39% believe that their pay will not change. This may indicate both greater uncertainty on the workers’ part and an awareness of the challenges that companies face as a result of economic trends.
However, still every second person planning to change jobs decides to take this step due to an unsatisfactory level of remuneration. This means that despite uncertainties, specialists and managers are confident enough in their skills to enter the job market in search of better pay. They do not particularly limit their financial expectations in the process.
