Navigating 2024: Budgeting for 4% Employee Raises

2023 has been a rollercoaster so far, hasn't it? As we gear up to tackle the upcoming year, let's talk about a topic that's always on everyone's mind – compensation increases! I’ve got some insights to share about budgeting for employee raises in 2024, so grab your favorite beverage and let's dive in.

Alas, just like the vampires and werewolves, the eternal tug-of-war between employers and employees still rages on. It seems that even with the desire and need to scale back, SHRM cites that employers are still at the mercy of the labor market, worker shortages, and inflationary pressures. According to a survey by Payscale, about 75% of companies are planning to increase employee salaries by at least 4%, but the survey also revealed that 22% of companies intended to cut the amount dedicated to salary increases in 2024. So which is it: increasing salaries or cutting back? Are you putting on a fake smile in a “this is fine” landscape, trying to remain competitive and attractive in a fast-paced and ever-changing job market? That means you have to consider keeping up with salary trends as well.

A 4% Boost for Your Team: Why It Matters

First off, kudos to you for prioritizing your amazing team. Employee morale and job satisfaction are the cornerstones of any successful nonprofit, and showing your appreciation by planning for those well-deserved salary increases is a huge first step. A 4% raise can do wonders for boosting motivation, loyalty, and overall engagement. It's a win-win – your team feels valued, and your nonprofit continues to shine even brighter.

Mapping Out Your Budget: Let's Break It Down

Budgeting might sound like a daunting and maybe impossible task, especially if your revenue has taken a dip. But fear not – I know you can get through it. Start by reviewing your current financials and projecting the upcoming year's expenses. Factor in the 4% raise across the board, and remember to account for any potential changes in staffing levels. Plus, setting aside a little extra for professional development shows your commitment to growing not just your organization, but also your team's skills.

Communication is Key: Sharing the Good News

Now that you've got your budget locked and loaded, it's time to spread the good vibes. Transparent communication is your secret sauce. Employees appreciate knowing that you're investing in their growth and well-being. Make sure to communicate their total rewards, which could include your company’s cost in benefits, retirement matches, PTO, and holidays. Whether it's through 1:1s, department huddles, or All Staff meetings, keep compensation talking points positive, consistent, and high-level.

Flexibility and the Bigger Picture

While 4% is a solid starting point, keep in mind that flexibility is your ally. Economic landscapes can shift, and your nonprofit might have unique considerations. Being prepared to adjust your budget and expectations is a sign of strategic thinking. Remember, it's not just about the numbers – it's about fostering a culture of adaptability and empathy.

Budgeting for 4% employee raises in 2024 is more than just crunching numbers – it's a commitment to your nonprofit's growth and your team's well-being. By mapping out your budget, communicating openly, and staying adaptable, you're setting the stage for a fantastic year ahead.

Here's to a thriving 2024 filled with impactful missions, dedicated teams, and those well-deserved 4% raises.