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Despite a softening job market, US employers are expected to grant merit increases of 3.3% to non-unionized employees in 2025—the same rate as this year, according to a report by Mercer.
“It’s not surprising to us to see employers really kind of keeping up with the part of what they had done in the prior year,” said Jack Jones, principal consultant at Mercer. “I think what it shows is employers are still prioritizing the investment in their talent.”
Next year, employers are expected to increase their total salary budgets—which includes money for promotions and adjustments to reach equity—to 3.7%, excluding unionized workers. The increase was 3.6% for this year. About one-tenth (9.3%) of employees are expected to receive promotions next year, compared to 8% in 2024.
However, Jones noted the numbers could change because only 20% of the more than 850 organizations surveyed had finalized their budgets. Still, most organizations (69%) don’t expect to adjust their initial projections.
Employees in the tech sector may fare better than the average worker. Their merit raises are expected to reach 3.5%, while their total compensation is projected to hit 3.8%. The company said that’s because their skills are in high demand. Meanwhile, healthcare workers will likely fall short of the national average. Merit raises for them are expected to advance 3%, while total compensation jumps 3.5%. Mercer said that healthcare institutions face rising costs in multiple areas like equipment and drugs, leaving them less money for salaries.
Meanwhile, Jones said that companies continue to create more pay transparency as employees and job seekers demand it.
Nearly one-fifth of companies (18%) share pay ranges with both their employees and job candidates. More than a quarter are considering following their lead. Over half of companies (52%) plan to conduct pay equity investigations.
Jones said some employers are becoming more transparent because legislation demands it. But he added there is also a cultural shift, with more employees and candidates expecting transparency. “As more and more employers do it, it’s almost a competitive advantage for them, and those employers that are not are missing out on some of the talent,” Jones said.