Top trends in Compensation and Benefits for 2024 (2024)

As we move into 2024, the landscape of compensation and benefits is evolving rapidly, driven by economic shifts, technological advancements, and changing workforce expectations. Companies are increasingly recognizing the importance of a competitive and comprehensive benefits package to attract and retain top talent. This article delves into the top trends in compensation and benefits for 2024, offering insights into how organizations can stay ahead of the curve by adopting innovative strategies and understanding the emerging preferences of the modern workforce.

Table of Contents

1 Remote Work Continues to Influence Compensation and Benefits Packages

1.1 Increased Percentage of Remote Work

1.2 Adjustments in Salary Structures

1.3 Focus on Flexible Benefits

2 Focus on Customized Benefits for Employee Retention

2.1 Customized Benefit Packages

2.2 Personalized Wellness Programs

2.3 Flexible Work Arrangements

3 Rising Importance of Mental Health Support Programs

3.1 Increasing Utilization of Employee Assistance Programs

3.2 Focus on Mental Health Benefits in Total Compensation Packages

3.3 Investment in Mental Health Training for Managers

4 Shift Towards Performance-Based Incentives

4.1 Increased Adoption of Performance-Based Incentives

4.2 Metrics-Driven Reward Systems

4.3 Linking Incentives to Business Outcomes

5 Increased Adoption of Flexible Work Arrangements

5.1 Shift Towards Remote Work

5.2 Flexibility in Working Hours

5.3 Hybrid Work Models

6 TalentUp Salary Platform

Remote Work Continues to Influence Compensation and Benefits Packages

Increased Percentage of Remote Work

In 2024, a considerable 68% of companies reported an increase in remote work arrangements compared to the previous year. This shift has directly impacted compensation packages across various industries.

Adjustments in Salary Structures

As remote work becomes more common, companies have had to reevaluate their salary structures. Statistics show that 42% of organizations have made adjustments to their compensation packages to align with remote work practices.

Focus on Flexible Benefits

A notable trend in compensation packages is the focus on flexible benefits for remote employees. Around 55% of companies have introduced new benefits such as wellness stipends, home office allowances, and flexible working hours to attract and retain remote talent.

Focus on Customized Benefits for Employee Retention

Customized Benefit Packages

Research shows that companies offering customized benefit packages have a 30% higher employee retention rate compared to those with standardized benefits.

Personalized Wellness Programs

Implementing personalized wellness programs has been found to decrease turnover by up to 20% as employees feel more valued and cared for by their employers.

Flexible Work Arrangements

Providing flexible work arrangements, such as remote work options or flexible schedules, can increase retention rates by as much as 25%, resulting in happier and more loyal employees.

Rising Importance of Mental Health Support Programs

Increasing Utilization of Employee Assistance Programs

Statistics show that the utilization of Employee Assistance Programs (EAPs) has been on the rise across industries, with a 37% increase in usage reported in the past year. Companies are recognizing the importance of providing mental health support to their employees, leading to a higher adoption rate of EAPs.

Focus on Mental Health Benefits in Total Compensation Packages

Employers are increasingly incorporating mental health benefits into their total compensation packages, with 62% of organizations now offering some form of mental health support as part of their benefits package. This shift highlights a growing awareness of the impact of mental health on overall employee well-being and productivity.

Investment in Mental Health Training for Managers

A significant trend is the investment in mental health training for managers, with 85% of companies providing or planning to provide training on recognizing and managing mental health issues in the workplace. Equipping managers with the tools to support their teams’ mental health is seen as crucial in creating a supportive work environment.

Shift Towards Performance-Based Incentives

Increased Adoption of Performance-Based Incentives

According to recent surveys, over 75% of companies are now incorporating performance-based incentives into their compensation packages. This shift is driven by the desire to align employee rewards with individual and team achievements, ultimately fostering a culture of accountability and high performance.

Metrics-Driven Reward Systems

An emerging trend is the use of key performance indicators (KPIs) to structure incentive programs. By defining clear metrics and targets for employees to meet, organizations can objectively measure performance and reward accordingly. Data shows that companies implementing metrics-driven reward systems report a 15-20% increase in overall employee productivity.

Linking Incentives to Business Outcomes

Organizations are increasingly tying incentive payouts directly to business outcomes and strategic goals. Studies have shown that companies that align incentives with key business objectives experience a 25% higher profitability compared to those with generic reward structures. This strategic approach not only motivates employees but also drives tangible results for the organization.

Increased Adoption of Flexible Work Arrangements

Shift Towards Remote Work

According to recent surveys, 75% of organizations have implemented or expanded remote work options for employees in the past year. This shift towards remote work not only improves employee satisfaction but also helps in reducing overhead costs for businesses.

Flexibility in Working Hours

Research indicates that 68% of employees value flexible working hours more than a salary increase. Companies are recognizing this trend and are offering flexible working schedules to attract and retain top talent. This flexibility leads to improved work-life balance and increased productivity among employees.

Hybrid Work Models

Reports show that 82% of organizations are moving towards hybrid work models, where employees have the option to work from both the office and remotely. This approach allows companies to maintain collaboration and team dynamics while providing employees with the flexibility to choose where they work best. Hybrid work models are becoming increasingly popular as they cater to the diverse preferences of employees.

TalentUp Salary Platform

To ensure you have a comprehensive understanding of your compensation, try theTalentUp Salary Platform. It’s crucial to have a great compensation strategy ready, especially in today’s competitive job market. Discover how TalentUp can help you evaluate job offers holistically and ensure you’re getting the best possible deal. Take action now to secure your financial future and overall well-being!

Top trends in Compensation and Benefits for 2024 (2024)


Top trends in Compensation and Benefits for 2024? ›

More companies are offering health allowances, often through flexible spending accounts or health savings accounts, to cover various health-related expenses outside of standard insurance. This approach reflects a commitment to comprehensive employee well-being and cost-effective healthcare solutions.

What is the compensation trend in 2024? ›

Employers are also generally eyeing smaller raises in 2024 than they did last year. Organizations predict an average base pay increase of 4.5 percent in 2024, compared to the average of 4.8 percent actually given in 2023.

How will compensation change in 2024? ›

Beginning July 1, 2024, the salary threshold increases from $35,568 per year ($684 per week) to $43,888 per year ($844 per week) The annual compensation requirement for highly compensated employees increases from $107,432 per year to $132,964 on July 1, 2024.

What are the employment trends in 2024? ›

US Job Market 2024-2025

The employment trends in the US are facing a high demand for immigrants with technical skills. Many companies in the US have switched to Hybrid and remote working models to boost productivity and create an atmosphere of work-life balance.

What percentage of people are looking for a new job in 2024? ›

In the U.S., LinkedIn has seen a 14% increase in job applications per opening since last fall, with 85% of workers saying they plan to look for a new role in 2024, a survey of 1,013 U.S. professionals conducted between November and December 2023 found.

What is the compensation package for employees? ›

The total compensation package encompasses various elements beyond basic pay or salary. This includes, but isn't limited to, health insurance, retirement plans, paid time off, bonuses, stock options, and other perks like flexible working hours or tuition reimbursem*nt.

What are the top 3 most sought after employee benefits? ›

Health benefits, dental insurance, and paid time off are the three most sought-after benefits by employees.

What is the most expensive employee benefit? ›

Health insurance typically makes up the biggest chunk of employee benefit costs for employers at 94% of insurance costs in 2023. Health insurance is only up $0.01 per employee from 2022, a slow down from the $0.09 increase from 2021.

Do 78% of employees say they would stay with a company because they like the benefits? ›

78% of employees reported they're more likely to stay with an employer because of their benefits program. Speaking of impressive benefits, make sure yours are up to snuff. Yes, flex hours, PTO and a 401(k) are all important and valued by employees. But is there any one benefit that stands out above the rest?

What is a highly compensated employee in 2024? ›

For the 2025 plan year, an employee who earns more than $155,000 in 2024 is an HCE. This information is not intended to provide tax or legal advice. Please consult a tax or legal professional as necessary.

Are salary increases lower than projected in 2024? ›

U.S. employers reported that 2024 annual merit increase budgets rose by 3.3 percent, on average, while total salary increase budgets jumped by 3.6 percent—down from the November 2023 projections of 3.5 percent and 3.8 percent, respectively, according to new data from Mercer.

How much will VA compensation increase in 2024? ›

After two years of record cost-of-living-adjustment (COLA) surges, disabled veterans and military retirees will see an additional 3.2% increase in 2024 in their monthly compensation benefits from the Department of Veterans Affairs.

What benefits do employees want in 2024? ›

On the 2024 agenda: Affordability, behavioral health, pharmacy benefits, paid time off – and long-term strategies for managing benefit cost without shifting cost to employees.

What are employees looking for in an employer in 2024? ›

Flexible working

While a minority of employers are pushing for a full-time return to the office, 73% of employees want more flexibility and this consideration is front of mind when looking for a new role.

What is the employee turnover trend in 2024? ›

As reported in the Labour Market Outlook – Spring 2024, the proportion of employees with a tenure of less than 12 months has reverted to the pre-pandemic level of around 16%. It had risen to a high of 18% in early 2022.

Are 69% of employees more likely to stay with a company for 3 years if they experienced great onboarding? ›

Further, 69% of employees say they are likely to stay with a company for at least three years after a great onboarding experience. Here, we delve into the complexities of employee retention and look at how better onboarding can drive your organization towards that workplace ideal of consistently-low staff turnover.

What is employee lifetime value? ›

What is Employee Lifetime Value? ELTV is a metric that calculates the total value an employee brings to a company over the tenure with the organization. This includes their current and future productivity and the potential impact the talent could have on the organization through their skills, experience, and knowledge.

Are employee benefits really necessary? ›

A solid employee benefits package can help to attract and retain talent. Benefits can help you differentiate your business from competitors. The value of employee benefits cannot be understated; they signify an investment in employees' health and future.


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