There is a shift in employer behavior regarding salary increases and remote work, according to a recent Payscale study. While fewer employers are planning to increase salaries this year, there is a positive trend in the enactment of pay transparency laws across more states.

The study reveals that a smaller percentage of companies are planning to offer pay raises, with some even cutting back on salary adjustments. Employers are trying to navigate through economic uncertainties and are aiming to reduce costs amidst increased tensions related to compensation.

Companies that are providing raises this year are offering an average increase of 3.5%, down from previous years. Additionally, more than 40% of employers are implementing return-to-office policies, with a portion even requiring more in-office work. However, top performers are finding ways to continue remote work despite these policies.

As a response to office return pressures, many employees have chosen to resign. Employers facing labor shortages and uncertainties like inflation and tariffs are recommended to offer flexible work arrangements, opportunities for growth, and competitive pay to attract and retain talent.

There are emerging challenges related to an aging workforce and a decreasing pool of younger workers entering the job market, as noted by economist Cory Stahle based on a recent Jobs report. Labor supply issues are expected to arise as the prime-age workforce faces stagnation or decline in participation rates.