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Pay Raises Expected to be Smaller in 2025
A new survey by Payscale shows U.S. employers are budgeting for smaller pay raises in 2025, with a predicted 3.5% increase, down from 4% in 2023 and 3.6% in 2024.
Despite the expected smaller raises, most employees - 85% - will still receive a pay bump, according to the survey. Matt Schulz, chief credit analyst at LendingTree, notes that many of those who received salary bumps last year did so by staying at their current employer.
"One of the interesting things that we saw was that for the most part, the people who got bumps in salary last year did so by staying at their current employer," said Matt Schulz, chief credit analyst at LendingTree.
LendingTree's own survey found that 82% of full-time workers who asked for a pay raise in the past year received one, with about half receiving a raise worth less than $5,000. However, almost half of those surveyed received raises worth more than $5,000.
"But that means that almost half of people say that they got more than $5,000," Schulz pointed out.
Jasmine Escalera, career expert at LiveCareer, advises employees to be prepared for a pay raise by keeping a journal of their accomplishments and contributions to their company. She recommends approaching the topic during a standard review period, or whenever an opportunity arises to discuss one's value.
"Even if you're not asking for a raise right in that moment," Escalera said, "you should be taking every opportunity when you're in front of your manager to not just talk about task, but to talk about contribution."
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According to LendingTree's survey, about 65% of workers expect their pay to increase in the next year. However, about a quarter of full-time workers actually took a pay cut this year.
"There's certainly a lot of volatility, a lot of unpredictability in the economy right now," Schulz said. "But the good news in this survey is that people do seem generally pretty optimistic about where things are going."