Alignment, Market Competitiveness Are TR Leaders’ Top 2026 Priorities

Regardless of geographic region, organization size, job level or business objective, total rewards leaders are basing their 2026 effectiveness on the ability to strategically align their programs with organizational goals. That is according to the results of WorldatWork’s 2026 Priorities for Total Rewards Leaders survey, released Thursday, Jan. 15.

Strategic alignment’s placement as the No. 1 priority by surveyed total rewards (TR) leaders comes after ranking second in 2025’s inaugural research on functional priorities. Market competitiveness of TR offerings ranked second in the new study, one position lower than in 2025. Employee understanding of the TR value proposition was third, two spots higher than in 2025.

“The placement of these three factors at the top of the list signals a repositioning of total rewards within organizations, where TR is increasingly seen as a strategic lever that supports key business priorities — whether that’s growth, cost management, talent retention or workforce transformation,” said Annie Lee, WorldatWork’s director of research and insights. “Market competitiveness remaining in the top tier tells us leaders recognize that rewards must remain credible and competitive externally. At the same time, the increased focus on employee understanding of the TR value proposition underscores the recognition that value can only be optimized if employees comprehend, trust and engage with what is offered.”

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• Two TR Leaders Provide a Personal Take on Their 2026 Priorities

WorldatWork’s 2026 findings are based on the survey responses (from Oct. 27 through Nov. 21) of 290 TR leaders, including:

• Directors or senior directors (37%)
• Managers or senior managers (27%)
• Vice presidents (senior or assistant) (15%)
• Consultants/analysts/specialists (11%)
• Chiefs or heads (6%)
• Other titles (3%)

Respondents represented a diversity of:

• Organization sizes
  • 500 to 2,499 employees (29%)
  • 2,500 to 9,999 (27%)
  • 20 to 499 (18%)
  • 20,000 or more (16%)
  • 10,000 to 19,999 (8%)
  • Less than 20 (3%)
• And, geographic regions
• United States (41%)
• Canada (14%)
• Europe (excluding the United Kingdom) (8%)
• U.K. (8%)
• India (8%)
• Asia (excluding India) (7%)
• Latin America and the Caribbean (6%)
• Middle East (4%)
• Africa (2%)
• Oceania (2%)

“TR leaders recognize that rewards programs must directly support organizational goals to drive impact, and realignment is required when these business and organizational strategies shift in response to a dynamic environment.”

— Sue Holloway, content director, WorldatWork

Strategic Alignment’s Increased Importance

Four of the six organization-title demographics and four of the six organizational-size demographics cited strategic alignment as the top TR priority among 12 selection options for 2026. (Among title groupings, managers/senior managers and consultants/analysts/specialists ranked it No. 2. For organization sizes, those 500 to 2,499 put it second and those with less than 20 employees put it third).

In addition, both respondents who feel they are strong (“doing very well”/“pretty well”) or weak (“struggling”/“just getting by”) in this area cited it as a major priority.

So, all this begs the question: Why the broad and increased importance in strategic TR alignment? And, what factors have influenced the rise?

Sue Holloway, a content director at WorldatWork, called it a logical “reflection of a long-term trend,” in which TR has evolved from a “transactional function” to a “strategic lever.”

“Regardless of organization size, type, region or business objective, leaders see this alignment as foundational to achieving outcomes and impact,” she said. “The consistency suggests alignment is not just relevant for large enterprises or certain geographies — it’s become essential across the board. TR leaders recognize that rewards programs must directly support organizational goals to drive impact, and realignment is required when these business and organizational strategies shift in response to a dynamic environment.”

Holloway cited four factors as both triggering today’s chaotic climate (in the U.S. and globally) and the responses of organizations and their TR leaders. These include:

• Economic uncertainty and financial pressure. “As a financial performance consideration, organizations are scrutinizing spend and demanding a clear return from their TR investments,” she said.
• A cooling labor market. “There is less emphasis today on aggressive pay competition.”
• Changing workforce expectations. “Employees want purpose, flexibility and transparency, and alignment helps deliver these in a way that supports organizational objectives.”
• Technology and artificial intelligence (AI) adoption. “As automation reshapes work, rewards strategies must align with new skills and organizational capabilities.”

The Elevation of the Value Proposition

Holloway called out the rationality of the other shakeups at the top of the priorities list, stating the slight downshift of TR offering market competitiveness (from No. 1 to No. 2) and the ascent of employees’ understanding of the TR value proposition (from No. 5 to No. 3) “suggests a pivot from ‘how much we pay’ to ‘how well rewards support strategy and how clearly that value is communicated.’”

“The elevation of employee understanding of the TR value proposition underscores a growing emphasis on transparency and communication,” she said. “Leaders recognize that rewards only deliver value when employees understand and appreciate them. This shift reflects a broader trend toward trust-building and engagement, both of which are especially important in times of uncertainty.”

Lee concurred with Holloway’s synopsis, adding that survey respondents’ emphasis on the value proposition “points to a critical execution gap leaders are working to close.”

Areas Ripe for Change

Survey respondents indeed acknowledged “transparency and communication” as current shortcomings, as they most frequently cited that phrase among what they most wanted to change about TR.

Progress in this area can positively impact employees and organizational leaders.

Regarding employees, the survey report mentioned the need to increase transparency in decision-making “so employees have a clear line of sight and see how their performance is linked to their compensation.”

Toward leaders, the report shared that they “want clearer, more consistent and more accessible communication about total rewards.” Respondent comments frequently highlighted “a lack of visibility into compensation practices, difficulty understanding pay structures, confusion about benefit value and limited communication.”

The full top-five list of change targets included:

1. Transparency and communication;
2. Total rewards strategy and employee value proposition;
3. Compensation competitiveness and pay practices;
4. Leadership buy-in, governance and decision-making; and,
5. Consistency, standardization and global alignment.

Other Survey Standouts

In a report full of noteworthy insights, Lee said two additional findings caught her attention:

• The acceleration of technology integration and automation of TR management. This was the No. 5 priority for 2026, after sitting at No. 10 for 2025. “This may signify organizations are recognizing that scalable tech and data-driven rewards management is a tactical prerequisite for effective execution,” she said.
• Flexibility, personalization and equity-focused reward practices continue to rank lower relative to other factors. Flexible and personalized rewards packages ranked 10th out of the 12 priority options (versus 12th in 2025), and equity, inclusion and transparency in TR offerings ranked 12th (versus 11th in 2025). “That doesn’t mean these areas are unimportant, but rather, may suggest leaders are prioritizing strategic alignment, competitiveness and communication before layering on more customized approaches,” she said.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Benefits
• Employee Compensation
• Organizational Performance
• Total Rewards