The median salary increase in 2024 stood at 3.8%, down from 2023 (4.3%). However, it significantly exceeds forecast inflation for 2024 (2%) and remains higher than the median salary increase observed between 2010 and 2020 (2.5% on average), demonstrating the efforts of companies to remain competitive in a market employment still in tension and to maintain the purchasing power of employees.
Nearly half of companies (47%) say that their increase budgets have been revised downwards compared to the previous year, due to changes in the economic context and in particular the inflation forecast for 2024 in decrease compared to 2023 (40%), concerns related to cost management in a demanding economic context (36%) and an anticipated recession or financial results more modest than expected (33%).
2025: A moderate decline but a shared global trend
Forecasts for 2025 confirm a further contraction in salary increase budgets, with an expected median increase of 3.5% in France, placing the country in the lower range of forecasts among the world's major economies.
In comparison, Canada (3.6%), Germany and the United States (3.7%) have slightly better prospects, while Brazil (5.9%) and China (4.6%) ) stand out with significantly higher forecasts. This slowdown in salary increases is a global trend, affecting the majority of countries with the notable exception of Brazil.
Beyond the median forecast increase of 3.5%, the reality of these forecasts varies significantly depending on several factors: only one company in 4 plans a 2025 salary increase budget greater than 3.9%, while one company in 4 plans a 2025 salary increase budget of less than 3%.
Attracting and retaining talent: the key to the equation
Despite economic tensions, companies are investing in initiatives aimed at attracting and retaining talent and allowing them to remain competitive in a still tense job market. In 2024, 37% of companies encountered difficulties in this area, a figure down compared to 2022 (-7 points) and 2023 (-5 points). Although down in 2024 compared to previous years, this nevertheless highlights a job market still in tension with in particular nearly four out of ten companies claiming to encounter real difficulties in attracting and retaining talent to meet the needs of activity in the short, medium and long term.
Faced with growing challenges related to talent management, companies are doubling their efforts and adopting strategic measures to remain competitive. Among the priorities: improving the employee experience (80%), strengthening initiatives in terms of diversity, equity and inclusion, particularly on the eve of the transposition of the European Directive on remuneration transparency , by June 2026 at the latest, and which would reinforce the obligations of companies in terms of pay and professional equity (73%), the expansion and clarification of training and skills development opportunities (66%) and the increased adoption of working practices flexible, including teleworking and its support for employees and managers (55%).
On average, companies have already implemented two additional initiatives compared to last year and plan to introduce one more to meet the demands of an ever-changing job market.
Salary spending is growing, but the pace is slowing
In 2024, 78% of companies increased their salary budgets, compared to 73% the previous year, but the average increase stands at +4.3%, after +7.1% in 2023 and +6.4% in 2022. Faced with competition in the job market and inflationary pressures, companies are adapting their remuneration policies: 39% have carried out a global salary review, while 38 % are now recruiting at higher levels in their salary scales to attract the best talent.
« The median budgets for salary increases for 2025, expected above the inflation observed in 2024 and forecast for 2025, reflect the desire of companies to maintain their competitiveness in a tense job market, marked by a low rate unemployment. In this context, companies are striving to optimize salary dynamics to meet the challenges of attracting and retaining talent. However, the stabilization of inflation around 2% and the difficulties encountered by certain sectors in recent months explain the slight drop in forecast budgets observed for this year. », analyzes Khalil Ait-Mouloud, Director of the Compensation Surveys Activity at WTW in France.
Methodology
The “Salary Budget Planning” survey – January 2025 Edition of WTW was conducted in October 2024. More than 1,000 companies in France, covering a wide range of sectors and French groups as well as subsidiaries of foreign groups operating in France, responded to it.
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