Small Business Compensation Insights from 2024 to Kickstart a Powerful 2025!
The New Year is widely known for setting goals, and we agree; there's no better time to dive deep into your compensation goals and strategies to set your company and employees up for success! This guide provides insights and takeaways from other small businesses in 2024 to help your business tackle compensation challenges and create effective pay strategies in 2025.
1. Wage Trends and Economic Pressures
Wage growth has slowed, with increases barely keeping pace with inflation.
40% of salaried employees didn’t receive raises in the past year.
Only 41% of all employees feel their pay sustains their lifestyle.
2. Generational and Gender Pay Differences
Younger generations like Gen Z (7% average pay increase) and Millennials (4.6%) are proactive in seeking raises and value pay transparency.
Men’s pay increased by 4.8%, while women’s increased by 2.7%.
Proactive pay reviews can help retain top talent.
Encouraging pay advocacy and ensuring pay equity is critical for fostering an inclusive culture and workplace.
3. Retention and Motivation
52% of employees prioritize higher base salaries over equity or bonuses.
71% of jobseekers are now prioritizing salary over anything else.
Flexibility, remote work, and job security are also key motivators of current employees.
4. Developing a Compensation Strategy
Benchmarking tools and marketing research can provide valuable insights.
Total Compensation Statements can be highly beneficial to show full value of benefits and perks to employees as transparency about pay, benefits, and total compensation is essential.
5. HR’s Role and Communication
HR teams should balance employee needs with company goals, focusing on transparent messaging and aligning pay with organizational goals and values.
How Center Benefits Can Help
Center Benefits offers tailored solutions to simplify compensation management for businesses, including:
Total Compensation Statements: Show the full value of salary, benefits, and perks.
Compensation Surveys: Gather employee and market insights that is industry specific to refine strategies.
Market Benchmarking: Ensure competitive pay rates for key roles.
Compensation Philosophies: Align pay practices with your business goals.
A transparent, thoughtful compensation strategy is essential for attracting and retaining top talent. Let us help you build a framework that balances employee satisfaction with financial sustainability in 2025!
Get in touch today to explore how we can help support your compensation needs by emailing Brandi at brandi@centerbenefits.net.
