NEW YORK, July 15, 2026 (GLOBE NEWSWIRE) -- Average salary increase budgets for US companies in 2027 are expected to remain stable at 3.4%, just slightly lower than 2026’s actual increase of 3.5%. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
The report found that pay budgets remained largely steady in 2025, with nearly 60% of organizations reporting no change between anticipated and actual salary budgets. Cost management pressures (32%), a tighter labor market (28%) and inflationary concerns (27%) continue to drive employers’ cautious approach to salary planning.
“Salary budgets may be holding steady, but the way organizations are using those dollars is changing significantly. Employers are moving away from broad-based increases and toward more precise, performance-driven pay strategies that target the roles, skills and talent segments that matter most,” said Brittany Innes, senior director, Rewards Data Intelligence, WTW.
This shift is already reshaping how employers manage compensation programs. More than one-third (33%) are adjusting their programs, with another 15% planning future changes. Other changes include: hiring at higher salary ranges (36%), increasing the use of retention bonuses or spot awards to help secure key employees (34%) and raising starting salary ranges (32%).
Economic uncertainty and financial pressures are also contributing to steady retention levels, with most employees (69%) remaining with their current employers and only 22% of companies adding head count. Rather than relying on hiring alone, employers are focusing on other ways to strengthen the employee value proposition, including improving the employee experience (47%), expanding training opportunities (40%) and enhancing health and wellness benefits (38%).
“Salary increase budgets reflect the current balance between the supply and demand of labor. While the focus is often on the low demand for labor, most leaders forget that we are still in the throes of low supply. Employers will continue to experience salary increases in the “land of 3%” for the foreseeable future given these dynamics. Those who focus on using that money wisely will be the ones that win the inevitable war for talent once demand picks up,” said Lori Wisper, senior managing director, Work & Rewards, WTW.
About the survey
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from March to May 2026. 34,024 responses were received from companies across 156 countries worldwide. In the U.S., 1,650 organizations responded.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.
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