Most Us Employers Plan To Keep 2026 Salary Increases Flat To Mercer

Bonisiwe Shabane

-Dec 27, 2025, 8:12 PM

most us employers plan to keep 2026 salary increases flat to mercer

Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today... The survey of more than 1,000 US organizations revealed that on average, employers plan to hold base salary increases for merit at 3.2%, and total increases at 3.5%, which encompasses all salary increases, including... Looking ahead, 61% of the employers surveyed anticipate that the economy will have a moderate to significant impact on compensation decisions in 2026. Nevertheless, employers remain committed to prioritizing skill and talent development (34%), market competitiveness (31%), and compensation adjustments (24%) next year. However, the data suggests a disconnect between these priorities and how budgets are allocated. More than 8 out of 10 (83%) employers indicated they would distribute their salary increase budgets equally across the organization, rather than directing more resources towards high-demand skills or critical market gaps.

Further, employers plan to promote fewer employees in 2026 – around 9% of their workforce, down from 10% in 2025, with an average pay increase for promotions of 8.7%. “Employers have a significant opportunity to strategically shape their spending to better align with critical talent goals,” said Lauren Mason, Mercer’s US Workforce Solutions Leader. “By focusing compensation budgets on high-demand skills rather than spreading resources too thin, leaders can more effectively drive their workforce strategy and secure the talent essential for success.” Mercer, a business of Marsh McLennan and a global leader in helping clients realize their investment objectives, shape the future of work, and enhance health and retirement outcomes for their people, has released the... The survey of more than 1,000 American organizations revealed that on average, employers plan to hold base salary increases for merit at 3.2%, and total increases at 3.5%, which encompasses all salary increases, including... Looking ahead, 61% of the employers surveyed anticipate that the economy will have a moderate to significant impact on compensation decisions in 2026.

Nevertheless, employers remain committed to prioritizing skill and talent development (34%), market competitiveness (31%), and compensation adjustments (24%) next year. However, the data suggests a disconnect between these priorities and how budgets are allocated. More than eight out of 10 (83%) employers indicated they would distribute their salary increase budgets equally across the organization, rather than directing more resources towards high-demand skills or critical market gaps. Further, employers plan to promote fewer employees in 2026 – around 9% of their workforce, down from 10% in 2025, with an average pay increase for promotions of 8.7%. “Employers have a significant opportunity to strategically shape their spending to better align with critical talent goals,” says Lauren Mason, U.S. workforce solutions leader at Mercer.

“By focusing compensation budgets on high-demand skills rather than spreading resources too thin, leaders can more effectively drive their workforce strategy and secure the talent essential for success.” NEW YORK, July 8, 2025 — Average salary increase budgets for US companies in 2026 are expected to remain stable at 3.5%, matching 2025’s actual increases. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. Three out of five organizations saw their salary budgets change in the last pay cycle. More than half (53%) of these organizations reported no change between their anticipated and actual pay budgets in 2025. For the nearly one-third (31%) of these organizations that are projecting lower salary increase budgets than last year, the most common reasons cited are an anticipated recession or weaker financial results (51%) and concerns...

Tight labor markets (59%) and inflationary pressures (30%) are the most commonly cited reasons for change among the relatively few organizations that are projecting higher salary increase budgets. While top-line budgets are generally holding steady, the real shift is happening beneath the surface ” “While top-line budgets are generally holding steady, the real shift is happening beneath the surface. Organizations are being more deliberate about how they allocate pay, where they focus investment and what outcomes they expect to drive. Employers are no longer simply reacting to economic signals; they’re reimagining how to best support broader business goals despite uncertainty,” said Brittany Innes, director, Rewards Data Intelligence. Despite stable pay increases, employees are staying put.

Fewer organizations this year have found employee stability challenging compared to the past two years. Less than one-third of organizations (30%) report difficulty attracting or retaining employees, representing a decrease of 11 percentage points since 2023. Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today... The survey of more than 1,000 US organizations revealed that on average, employers plan to hold base salary increases for merit at 3.2%, and total increases at 3.5%, which encompasses all salary increases, including... READ MORE As a SHRM Member®, you’ll pave the path of your success with invaluable resources, world-class educational opportunities and premier events.

Build capability, credibility, and confidence to influence strategy, shape culture, and drive measurable business impact. Demonstrate your ability to apply HR principles to real-life situations. Stand out from among your HR peers with the skills obtained from a SHRM Seminar. Demonstrate targeted competence and enhance your HR credibility. Referring to the current political and business environment as a “time of change,” an April report by consulting firm WTW on widescale U.S. policy shifts pointed to American workers’ concern about the state of their anticipated salary increases.

In that survey, 56% of surveyed employers indicated their workforces are worried about base pay increases. Respondents tried to temper those fears, even slightly, with 48% stating they anticipated no impact to this year’s projected salary increases but some impact on their 2026 budget, and 28% anticipating no impact this... With that as a backdrop, WTW released its Salary Budget Planning Report on Tuesday, July 8, which, on its face, could perhaps be summed up as: the more things change, the more things stay... Some complex activities are supporting — and even countering — that smoothness. According to the report, the composite look from 1,569 surveyed U.S. organizations shows average salary increase budgets for 2026 will remain stable at 3.5%, matching American employers’ actual increases for 2025.

(WTW had initially predicted 3.7% increase budgets for 2025.) The firm’s expanded outlook report for 2026 reflected similar stability for select countries outside of the U.S. “While top-line budgets are generally holding steady, the real shift is happening beneath the surface,” said Brittany Innes, the director of rewards data intelligence at WTW. “Organizations are being more deliberate about how they allocate pay, where they focus investment and what outcomes they expect to drive. Employers are no longer simply reacting to economic signals; they’re reimagining how to best support broader business goals despite uncertainty.” WTW’s data points for 2026 projections and 2025 actuals resemble those found in other recently released salary budget survey reports for the U.S. market.

While Americans' salaries are projected to grow at a steady pace in 2026, following years of volatile market adjustments, some changes to their compensation are anticipated next year. According to the results of the August Compensation Planning Survey by consulting firm Mercer, U.S. employers are projecting a "merit increase budget"—money set aside for salary hikes—of 3.1 percent in 2026, compared with 3.2 percent in 2025. Meanwhile, the "total increase budget," representing the overall average increases in compensation, is expected to see flat growth of 3.5 percent. Salaries have failed to keep pace with inflation in recent years, with wages rising by 21.5 percent since the beginning of 2021 while prices climbed 22.7 percent, according to a Bankrate analysis of Labor... As Americans face heightened financial pressures in 2025, and with overall confidence in the U.S.

economy declining, the prospect of promotions or better compensation will be a key concern for many. According to Mercer's report, U.S. employers expect to promote around 8.1 percent of the employee population in 2026. Nearly all U.S. companies (82 percent) anticipate "economic factors" affecting their compensation decisions in the coming fiscal year. Of these, 20 percent believe the effects will be significant, 46 percent expect these to be moderate and 16 percent foresee a minimal impact, with 16 percent unsure and only two percent expecting no...

NEW YORK--(BUSINESS WIRE)-- Mercer, a business of Marsh McLennan (MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their... The survey of more than 1,000 US organizations revealed that on average, employers plan to hold base salary increases for merit at 3.2%, and total increases at 3.5%, which encompasses all salary increases, including... Looking ahead, 61% of the employers surveyed anticipate that the economy will have a moderate to significant impact on compensation decisions in 2026. Nevertheless, employers remain committed to prioritizing skill and talent development (34%), market competitiveness (31%), and compensation adjustments (24%) next year. However, the data suggests a disconnect between these priorities and how budgets are allocated. More than 8 out of 10 (83%) employers indicated they would distribute their salary increase budgets equally across the organization, rather than directing more resources towards high-demand skills or critical market gaps.

Most Us Employers Plan To Keep 2026 Salary Increases Flat To Mercer

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