Seventy-One Percent of CFOs Plan to Raise Average Compensation More Than 4%
“Seventy one percent of CFOs plan to increase average enterprise-wide employee compensation in 2024 faster than inflation,” said Alexander Bant, chief of research in the Gartner Finance practice. “Even with tighter economic policy and pressure from boards and investors on profitable growth and employee productivity, CFOs are outpacing inflation that has now almost returned to a neutral rate below 3%.”
Employee compensation is second only to technology with 82% of CFOs planning an increase in 2024.
Although there’s been a shift toward smaller pay increases compared to 2021-2023 when inflation was running near 8%, the majority (71%) of CFOs are planning to increase average pay by at least 4%, above the current rate of inflation in most major markets. The proportion of CFOs planning to increase average employee compensation by 10% or more fell by 3 percentage points year-over-year (see Figure 1). Most CFOs (58%) are planning 4% to 9% increases, a notable drop from the 70% who had planned to do the same last year.
Figure 1: Planned Changes to Average Employee Compensation
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Source: Gartner (March 2024)
Finance Employee Pay Expectations Also Rising
Gartner experts have identified four finance talent retention drivers beyond pay that CFOs should invest in to improve retention in their function.
“Work-life balance, location, health benefits and vacation are all significant factors that improve retention and give CFOs additional levers beyond relying on just base pay increases.” said Bant.
Return-to-Office Mandates Could Harm Retention
“Finance leadership should be clear that enforcing return-to-office mandates comes with attrition risk and should be weighed against the potential benefits,” said Bant. “Especially so in the current talent market where replacing those who choose to leave will not be easy or inexpensive.”
