Americans Lost 10% Of Their Salaries in 2023 Thanks to Cuts in Employer 401(k) Contributions, Medical Insurance & Other Benefits
Written by
Tina Nazerian
Edited by
Nicholas Morine
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If it’s been some time since you’ve changed jobs, you might be earning less — without being aware of it.
According to a new Glassdoor report, “2024 Workplace Trends,” approximately 7% to 8% of employees who remain “in their same job at the same employer in a typical year see their salary decline on an annual basis.” But in 2023, more employees (10%) who kept the same role at their existing employer suffered a salary decline.
But even if you’re not in the 10% of workers whose salaries decreased in 2023, that doesn’t necessarily mean you’re in the clear. As Glassdoor explained, “employers looking to cut costs have more levers beyond salary.”
Employers won’t necessarily make a “downward adjustment for wages and salaries,” Glassdoor continued, but during “soft labor markets there are other dimensions of total compensation that commonly decline.” Those dimensions include “hours worked (for non-salaried workers), equity and incentive-based compensation, and the company-contribution to the cost burden of benefits like health insurance or retirement plans.” In other words, you can get the same amount deposited to your bank account every two weeks but end up losing money in another area, such as having to pay a higher health insurance premium, because your employer decided to scale back its contributions.
Other Work Perks May Be Missing, As Well
Other work perks that might decrease? Glassdoor noted that there’s “some evidence that benefits access has started to erode, a trend that could accelerate in 2024” — specifically, “the shares of employees with access to 401k plans, dental insurance, tuition assistance, commuter assistance, gym memberships and mobile phone discounts has declined, and the share reporting access to vision insurance has stagnated.” Glassdoor added that, for the most part, the declines have been more pronounced in tech, finance and other industries that have had a challenging 2023.
If you’re considering switching jobs to avoid a reduction in your total compensation, think through the pros and cons. If you identify more pros than cons, then put together an action plan and start taking steps to secure a new role. And if you have the urge to leave before you get a new offer, consider 2017 research that found that people who were employed and actively seeking work got the greatest number of employer contacts and job offers. By remaining patient and pursuing your job search while you’re employed, you can maximize your chances of getting a salary increase — and some great work perks.
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