2024 comp predictions
And vote on what you think is most likely to happen
Here are my comp predictions for 2024:
Pay transparency takes a breather. More proposed laws will get shelved and we’ll see delayed effective dates as politicians eye choppy markets and an election year. Beyond a couple splashy examples, job posting disclosures will improve only modestly.
Non-standard equity vesting schedules stick around and grow. Necessity drove experimentation with shorter terms and non-ratable schedules last year. Rather than one-off saves, these alternative approaches will grow in usage.
AI Engineering pay premiums increase. R&D headcount growth will focus on AI and demand will soar higher. Equity pay will continue to lead but cash premiums will grow as companies adopt discrete AI job families.
Comp analysts begin evolving into comp scientists. Comp job postings will increasingly require not just Excel, but also R, Python, BI tools, etc. We’ll begin to see job postings for “Comp Data Scientists.” Credit to Supriya at Roblox for this prediction.
Skills-based compensation gains momentum. Many leading companies, especially in tech, will add skills to their job architecture and begin analyzing compensation patterns. A prominent company will announce a skills-based pay structure.
Bonus: Attrition will rise (but remain below normal). Not a strictly compensation-focused prediction, but I do think market optimism is going to drive more people to collect their bonuses after comp planning and finally get that new job. Comp and finance teams will breathe a sigh of relief as their headcount models’ assumptions look more realistic. We’ll exit the year with a heating-up market, but overall levels will sum up below-normal. The election will prove me right or wrong.
Grading last year’s predictions:
Pay transparency laws accelerate. New and/or expanded pay transparency laws were signed in Illinois and Hawaii, and more laws were proposed in Massachusetts, Missouri, Virginia, and more states. And the EU announced its Pay Transparency Directive. Score: 1.
Tech layoffs get much worse. Layoffs grew from 154k in 2022 to 225k in 2023, mostly in Q1. Score: 1.
Companies begin experimenting with In-Office/Remote pay bands. We did see a return to geo-tiered pay structures and experimentation with RTO/hybrid work models, but I haven’t heard much about tying pay to being in-office. Score: 0.
Extra days off go the way of the dinosaur. Yep, everybody got back to work when the stuff hit the fan and the need to impress prospective candidates waned. Score: 1.
Choice between cash versus equity goes mainstream. A few more prominent tech companies experimented with this, but we’re far from wide adoption. Score: 0.
Overall, 3.0 / 5.0 - that was my stretch goal, so I’m happy with that.
How did you, my readers perform? I polled you in January last year:
Reader score: 2.0 / 5.0 for pay transparency and layoffs. Beat you. 🙃
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