Well, I just went down a rabbit trail of songs that have lyrics about pay. Why you ask? Because we have to talk about it, AGAIN. (And I didn’t find any good ones. Let me know if you’ve got one)
There are so many things happening in the economy and political landscape that are impacting what your employees are expecting in their compensation and, in turn, what you should be taking into consideration.
Here are a few of those items:
- Workers were paid 1.2 percent more in the first quarter of 2024 than in the fourth quarter of 2023. This is a higher growth rate than predicted which is another sign of inflation.
- The Department of Labor also published the final Overtime Rule that changes the minimum salary for exempt workers, first in July to $43,888, and then another bump occurs in January 2025 to $58,656. This new rule also includes an automatic cost of living increase to this threshold every three years after that.
- There is lots of talk at the state and federal level to increasing minimum wage.
- We add in record lows in employee engagement and we’ve got ourselves quite the puzzle. (See below for more on that)
So, what does this mean for you as a leader in your organization? It can mean a lot of things. What I don’t recommend is to take drastic action right now. First, I believe that the Overtime Rule will be challenged. Also, I think there are creative ways to incentivize employees to stay, other than giving huge increases to base compensation. There are also market considerations to think about. Do you want to lead or meet the market? Where are you at right now?
We can help with all of this! We can support you on engagement strategies, compensation benchmarking, and working through this new Overtime Rule and everything that it might mean for your employees, compensation strategy and culture.
We are here to support you! Reach out if we can.