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The US economy ended 2023 on a strong note, with employers adding 216,000 jobs to their payrolls—higher than analysts had expected—and wages rising 4.1% from the previous year. Fears of a recession calmed, while stocks closed out the year close to record highs.
The continued strength of the labor market evidently had an impact on workers’ attitudes about their jobs, as a higher share of them asked for raises and promotions last year, according to new data from business intelligence company Morning Consult. Some 34% and 26% of employed US adults surveyed in December said they’d asked for a raise or promotion in the last year, up from 30% and 22% the year prior.
HR pros should expect such requests to continue for as long as the labor market remains tight, Jesse Wheeler, senior economist for Morning Consult, told HR Brew.
Jobs, wages hold strong. Even though labor market indicators such as employment, job openings, and wage growth have been cooling down from the historic highs the US saw in 2021 and 2022, the continued tightness of the labor market is still fueling confidence among workers, Wheeler said. He noted wage growth is now outpacing inflation, and nominal wages saw their largest monthly increase since June 2023 in December.
“People are out there still getting wage increases, and the labor market remains tight,” he said. “We’re seeing that in our data.”
The success of organized labor in 2023 may have also contributed to a heightened sense of leverage among workers, Wheeler said. More than 525,000 workers participated in strikes in 2023, with unions such as United Auto Workers and the Screen Actors Guild winning higher wages and protections in their contracts regarding issues such as electric vehicle transition and artificial intelligence.
More workers surveyed by Morning Consult reported they were “very likely” to receive a raise if they asked for it as of December than those who responded “very unlikely,” a reversal from 2022 levels. Going into 2024, should unemployment remain low and job openings plentiful, “perceptions of leverage in the workplace will continue to be relatively strong,” Wheeler predicted.
Expectations vs. reality. It’s not clear from the Morning Consult data what share of workers are actually receiving the raises they’ve asked for. Recent surveys from consulting firms WTW and Mercer suggest employers are budgeting less for pay raises in 2024, and employer spending on compensation and benefits is slowing, according to recent government data.
Despite these downward trends, Alexandra Carter, director of the Mediation Clinic at Columbia Law School, told the Wall Street Journal she expects workers to continue to push for pay hikes. “If you’re an excellent performer in an industry with lots of job openings, it’s much cheaper for the company to give you a substantial raise than it is to deal with a potential revolving door of new candidates,” Carter told the Journal.