A new Payscale study reveals that fewer employers are planning salary increases this year due to economic uncertainties and increased employer power in the labor market. The report indicates that 20% of organizations are scaling back raises, while 6% are cutting pay increases entirely. Average salary hikes are expected at 3.5%, down from previous years. Moreover, over 40% of employers are enforcing return-to-office policies, prompting many top workers to leave their positions. Despite these challenges, pay transparency laws are emerging as a hopeful trend for job seekers.
"Between the precarious economy, increased employer power in the labor market, and a heated political climate, organizations have been grappling with increased tensions when it comes to compensation. There's an expectation to reduce compensation costs while economic conditions are uncertain."
"There is uncertainty around what they will be up against with inflation and tariffs. Many industries are proactively seeking new hires right now, however, and companies that offer flexible working arrangements will reap the benefits in attracting talent."
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