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Executive Salary Trends You Should Be Aware of In 2024 was originally published on Ivy Exec.
Finding and mentoring executives to head a company isn’t always easy. You must identify suitable candidates and provide them with the resources needed to be great leaders.
While many factors affect your ability to attract and retain top talent, your compensation strategy has a major effect. You will likely retain your best employees if you pay well and have lucrative benefits.
Keeping up with executive salary trends allows you to fine-tune your strategy. It enables you to understand what’s happening in the economy to make better decisions. Here are some top executive salary trends to know in 2024.
📈 A Rise in the Use of Performance-Based Pay
Every business owner wants value for the money they pay their team. No one wants to spend a lot of resources on an employee that doesn’t contribute much.
More companies are focusing on performance-based pay to match industry trends. Instead of paying a fixed amount, they reward executives who go the extra mile. If someone bags a big deal, they get a cut. They may even get a salary increase or additional employee benefits. These may range from commissions to bonuses or even tax-saving benefits.
You will need monitoring tools if you want to follow this trend in your company. These will help you measure how your executives perform based on different metrics.
📈 Increased Pay Transparency
In the past, employees didn’t know how much their coworkers made. Some companies even had policies that prevented colleagues from revealing their pay. But this is changing in 2024 as more companies embrace pay transparency.
Executive salaries are now open knowledge to every employee. This lowers pay discrimination, increasing fairness in company leadership. It contributes to improved performance and trust between workers and their employers.
Pay transparency is also becoming a common practice during hiring. Instead of listing executive salaries as competitive, many employers are giving a range. Sometimes, they may provide an exact figure and list all the benefits.
This move has significantly improved the hiring process. Applicants interested in executive positions know the exact compensation they will get. This is helping companies with good pay impress and attract top talent.
Other benefits of this trend are:
- It improves job satisfaction for all employees
- It promotes equity
- It lowers pay rumors among employees
Pay transparency has many perks, but it also comes with some drawbacks. Executives earning less than their colleagues may feel undervalued. Even if you can justify the reason for the disparity, there is no guarantee that they won’t be less motivated to do their job.
Another issue coming up due to pay transparency is workforce envy. Some employees may feel jealous of executives earning more, leading to resentment. Employers can avoid these issues by communicating with their workers and creating a pay transparency policy.
📈 Companies Pay More to Bag Top Executives
Competitive pay is a priority for many job seekers. Hence, business owners must offer decent salaries to attract the right talent. They also must pair it with other perks like flexible working hours and paid leave.
This trend will have several effects on job seekers and employers in 2024. Executives negotiate and qualify for better salaries at their current workplaces or when applying for new jobs. On the other hand, you will have to benchmark salaries in your industry to ensure you pay top talent fairly. This can increase retention and ensure you offer good deals when scouting new talent.
📈 Executives Want Salary Raises
Another trend to expect in 2024 is that executives will ask for raises. They may request it if they feel they deserve a reward for their performance in 2023. Besides, it may result from additional responsibilities in the company.
The harsh economic times have made life more expensive and lowered the purchasing power of money. People need more cash to afford the same things they could buy before. Employers should expect executives to ask for raises to adjust to the new cost of living.
If you are venturing into a new market, some executives may need to visit the new offices until things are up and running. As a result, they must adjust their personal life in many ways. For example, if they are parents, they may need to hire someone to care for their children while they are away. Expect your executives to ask for a salary raise if their role requires them to travel more in 2024.
📈 Paying in Cryptocurrency
The world is continually embracing the use of cryptocurrency. Some companies are even using it to compensate their employees in place of traditional payment methods.
Since crypto is highly volatile, how do employers compensate the right amount? Well, there is no way to guarantee they don’t under or overcompensate. They have to take the risk and ensure employees are on board with this currency.
If you are considering jumping on the crypto-pay bus in 2023, there are a few things to note. First, not all states allow employers to compensate using this currency. You will also have less legal protection. This means you can’t reverse the transaction if you overpay an employee. You will only get your money back if the recipient resends it.
While the pay-in-crypto trend raises concerns, there are ways to navigate some issues. Here are a few pointers:
- Pay overtime and minimum wages in US dollars
- Don’t forget to remit payroll taxes
- Use a third-party vendor for the transactions
- Don’t force your employees to accept crypto pay
📈 Increased Merit Salary Raises
Most firms in the US are adjusting their salary budgets. In particular, we expect a 3.5% rise in merit salary increases in 2024. Executives who performed well in 2023 will likely enjoy better pay in 2024.
So, how does this trend affect employers? Retaining the best executives may become more complicated if you don’t increase their pay. Based on these statistics, some workers will likely quit if you deny them a raise despite impeccable performance.
Keep Track of Executive Salary Trends
Compensation strategies are evolving every year as the job market changes. Executives expect their bosses to value their talent and compensate them accordingly. They anticipate monetary rewards for doing their job well and exceeding expectations.
As an employer or business owner, it’s vital to always keep up with industry trends regarding compensation. This way, you can budget correctly and match what your competitors offer top executives.
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