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*Employees define FAIR PAY: June 2025!

According to a San Francisco based finance company called NerdWallet, employees believe that a sizeable annual pay bump — in most cases above 5% — is what they consider “fair”.  Companies, on the other hand, are looking to pump the brakes on salary increases in 2025, with many planning to lower the rates of annual pay increases that have been in place the last few years.

And what an employee considers “fair” varies by generation

  • Gen Z workers say that a 10.5% annual increase is fair
  • Millennials say 11.2%
  • Generation X workers are closer to 7% hits the fairness mark, and
  • Baby Boomers consider 5.6% to be fair.

According to SHRM, the Society for Human Resource Managers, an employee’s perception of “fairness, specifically when it comes to annual pay increases, is complicated.  It incorporates a lot of information – not just how their increase compares to their friends increase or what they think is going on in the marketplace. Many are more concerned about whether or not their pay increase covers the increases in what it takes for them to live.   According to SHRM, “Survey respondents will use their own beliefs, history, and interpretation to determine what they consider fair.” 

Are these perceptions about wage fairness a problem for employers?

We think they might be.

According to US Labor Statistics , wages and salaries in 2024 increased by only 3.7% year-over-year – a significant departure from what employees considered “fair”.  This is a discrepancy that could be a problem, not just creating opportunities for disappointment but opening up the doors for higher paying predators to attract some employees away from employers who have been slow to keep up with escalating costs of living increases. While workers no longer have the upper hand in the job market as they did post covid, there is still reason for employers to be watchful and to explain their pay plans carefully.  

For the facts on pay increases across the nation, here’s SHRMS most recent report on compensation tends.

2025 Compensation Trends: Pay Transparency, Slowing Raises, and More

PACE Staffing Network is one of the Puget Sound’s premier staffing /recruiting agencies, helping Northwest employers find and hire employees based on the “right fit” for over 50 years.

A 5-time winner of the coveted “Best in Staffing” designation, PACE is ranked in the top 2% of staffing agencies nationwide based on annual surveys of customer satisfaction. PACE services include temporary and contract staffing, temp to hire auditions, direct hire professional recruiting services, Employer of Record (payroll) services, and a large menu of what we call HIRING HELP that allows clients to purchase a variety of candidate screening and assessment services on an ad hoc basis, augmenting your internal staffing or hiring resources.

To learn more about how partnering with PACE can make a difference to how who and how you hire, contact our Partner Services and Solutions team at 425-637-3312, email us or visit our website.

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