Budgets for employee salary increases have grown by an average of 4.4% in 2023, the highest increase in more than two decades, according to a long-running survey.

US Salary Increase Budgets, a survey conducted annually since 1985 by The Conference Board, also found that the 409 companies surveyed are forecasting another 4.1% increase in 2024. The 2023 increase is the largest since 2001.

The survey defines a salary increase budget as “the pool of money that an organization dedicates to base pay increases (base salary or hourly rates) for the year.”

The findings come on the heels of the latest quarterly AICPA Business and Industry Economic Outlook Survey, which found that optimism about the U.S. economy among CPA decision-makers doubled from the previous quarter, up to 29% from 14%. Those surveyed ranked “availability of skilled personnel” as the top challenge facing organizations.

According to The Conference Board survey, the actual median increase for 2023 was 4.0%, matching the median increase in 2022. While recent AICPA research in the 2023 National Management of an Accounting Practice (MAP) Survey revealed a more pronounced salary increase since 2021 among accountants at responding firms, the executive summary of the report noted that the profession has still more ground to make up.