Smaller pay raises expected for U.S. workers in 2025

WASHINGTON, UNITED STATES — Despite a robust labor market with job security and rebounding job openings in November, U.S. employers are preparing for more conservative salary increases in 2025.
According to a recent Salary Budget Survey by Payscale, companies plan to offer an average raise of 3.5%, a slight decrease from 4% in 2023 and 3.6% in 2024. However, the survey brings a silver lining: approximately 85% of employees are projected to receive a pay bump next year.
Payscale’s survey gathered insights from 1,550 organizations between May and June 2024.
Stable job market, rising costs
The job market is showing signs of resilience, with additional 227,000 workers in November alone. Nevertheless, with persisting high prices, many employees might find themselves seeking a raise to manage increased living costs effectively.
Effective strategies to secure a pay raise
LendingTree’s chief credit analyst, Matt Schulz, notes a compelling trend from their findings: “One of the interesting things that we saw was that for the most part, people who got bumps in salary last year did so by staying at their current employer.”
Indeed, their survey revealed that 82% of full-time workers who asked for a raise in the past year were successful, with about half receiving an increase of less than $5,000. Schulz adds, “But that means that almost half of people say that they got more than $5,000.”
However, Jasmine Escalera from LiveCareer suggests preparing a detailed account of personal contributions and achievements before initiating such a conversation. “Even if you’re not asking for a raise right in that moment, you should be taking every opportunity when you’re in front of your manager to not just talk about tasks but to talk about contributions.”
Navigating career conversations
Escalera recommends timing these discussions around standard review periods, although timing is flexible. She emphasizes the importance of self-promotion and visibility in the workplace: “You have to learn how to self-promote, increase your visibility and have open and honest conversations about your value,” she states, underscoring the necessity to be prepared to demonstrate one’s worth at any given opportunity.
Despite some workers experiencing pay cuts or job shifts this year, optimism remains high with 65% of employees expecting an increase in their compensation in the coming year. Schulz remarks on the current economic climate, “There’s certainly a lot of volatility, a lot of unpredictability right now, but the good news in this survey is that people do seem generally pretty optimistic about where things are going.”