University of Kwazulu-Natal

Wtw 2026 U S Salary Increase Budgets Will Hold Steady At 3 5

Bonisiwe Shabane
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wtw 2026 u s salary increase budgets will hold steady at 3 5

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. 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. Good morning. Salary increases for employees are expected to remain similar next year amid a flatter, but potentially volatile, economic outlook. For U.S.

companies, the average salary increase budget is projected to hold steady at 3.5% in 2026, matching the actual increases seen in 2025, according to the Salary Budget Planning Report by Willis Towers Watson (WTW). About 31% of respondents plan to lower their salary increase budgets compared to last year, mainly due to concerns about a possible recession, weaker financial performance, and the need for tighter cost control. In contrast, the few organizations planning to raise their budgets cite a competitive labor market and inflationary pressures as key reasons. The global survey, conducted from April to June, included responses from 1,569 U.S. organizations. Employers are no longer simply reacting to economic signals regarding pay allocation, according to WTW.

They’re accounting for other labor factors. “Just as they do with any other investment, the most forward-thinking CFOs that we speak with are looking holistically at all aspects of pay and benefits to better understand which programs resonate most with... July 08, 2025 11:09 ET | Source: Willis Towers Watson US LLC Willis Towers Watson US LLC NEW YORK, July 08, 2025 (GLOBE NEWSWIRE) -- 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. 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... 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.”

WTW (NASDAQ: WTW) reports that US salary increase budgets for 2026 are expected to remain flat at 3.5%, matching 2025 levels. The study reveals that 53% of organizations maintained their anticipated pay budgets in 2025, while 31% project lower increases due to recession concerns and cost management. Employee retention has improved, with only 30% of organizations reporting difficulty in attracting or retaining talent, down 11 percentage points since 2023. Companies are responding through various initiatives, including enhanced employee experience (47%), improved health benefits (43%), and increased training (40%). The average annual payroll expense increased by 3.6%, with 70% of organizations reporting higher total payroll costs than last year. On the day this news was published, WTW declined 0.07%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication. NEW YORK, July 08, 2025 (GLOBE NEWSWIRE) -- 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. 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. In a Willis Towers Watson survey of U.S. companies, participants said they’re planning to increase salary budgets by 3.5% in 2026, the same as actual increases this year. Planned salary budgets for 2026 are looking a lot like actual salary budgets this year. That’s according to recent research by British insurance brokerage Willis Towers Watson.

Across a survey of 1,557 organizations that are either headquartered or have operations in the U.S., the median salary budget for 2026 is expected to increase by 3.5%. Notably, that’s the same level of actual salary budget increases in 2025. As finance chiefs know, budgets can and do often change for any number of reasons, so it’s an open question whether that 3.5% increase will even come through in 2026. Consider the fact that, in WTW’s same survey at the end of 2024, U.S. participants projected a salary budget increase of 3.9%. And that came after an actual budget increase of 4% in 2024.

This all comes against the backdrop of continued economic uncertainty, at home and abroad. “While concerns about inflation continue to influence spending for many organizations and remains a top factor in influencing budget change, the percentage of survey respondents citing inflation as a cause of budgetary adjustments has,... Simplicity reduces overload and drives clearer, faster work across remote teams. Selena Rezvani shares modern leadership strategies for trust, self-advocacy, and mental health in the future of work. The GDP number arrived just before Christmas, wrapped like good news. The U.S.

economy grew at a 4.3% annual rate...

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