US employers are planning an overall average salary increase of 4.0% for 2024, according to a report by WTW. The planned increase is down from the actual average increase of 4.4% in 2023, though it’s still higher than the 3.1% salary increase budget in 2021.

“We are seeing healthy salary increases forecasted for 2024,” Hatti Johannsson, research director of reward, data and intelligence at WTW, said in a press statement. “Though economic uncertainty looms, employers are looking to remain competitive for talent, and pay is a key factor.”

Primary factors influencing the increased salary budgets include inflationary pressures and concerns over a tight labor market, cited by 55% and 52% of surveyed employers, respectively. However, inflation is slowing down from the highs of recent years and the labor market is shifting, with voluntary turnover and attrition at 11% overall, according to the report.

The report also found that while still a common concern, fewer organizations are reporting issues with attracting and retaining talent, down to 48% currently from 60% in 2022.

Meanwhile, employers seek to strike a healthy balance within their total rewards packages; nonmonetary actions are a big focus for employers looking to attract and retain talent, according to the report. At most organizations, nonmonetary actions include more workplace flexibility, 63%; broader emphasis on diversity, equity and inclusion, 60%; and improving the employee experience, 55%. In addition, most employers have committed to hiring staff in a higher salary range, undertaking compensation reviews of specific employee groups and raising starting salary ranges.

The data is based on a global survey conducted this month, with more than 33,000 responses from companies covering more than 150 countries worldwide.