Are you expecting a significant raise in 2025? Think again. The job market is starting to cool from its rapid growth during the pandemic era, which means your annual raise may not be as generous as you had hoped.
According to a recent survey by WTW, a consulting firm, the typical worker can expect a 4.1% pay raise for 2025, down from 4.5% this year. This estimate is based on data gathered from 1,888 U.S. organizations with fiscal calendar years, but actual raises may vary by the end of the year when salary budgets are finalized.
So why the decrease in pay raises? According to Lori Wisper, WTW’s work and rewards global solutions leader, the size of workers’ salary increases is primarily driven by the supply and demand of labor. With the job market cooling off, companies may not feel the need to offer as much money if they’re not receiving as many applications or have fewer job openings.
But don’t despair just yet. Despite the decrease in projected raises, a 4.1% raise is still relatively high compared to recent years. In the years following the 2008 financial crisis, the median annual pay raise hovered around 3%. This increase to over 4% during the pandemic era is notable, as salary growth tends to fall rather than rise.
While the job market may not be as hot as it was in 2021 and 2022, there are still opportunities for growth and advancement. It’s essential to stay informed and proactive about your finances and career goals to ensure you make the most of your earning potential.
At Extreme Investor Network, we understand the importance of personal finance and helping individuals navigate the ever-changing landscape of the job market. Stay tuned for more tips and insights on how to maximize your financial potential and achieve your goals. Subscribe to our newsletter for the latest updates and exclusive content.