QuickPulse Report Shows Salary Stability Carrying Over Into 2027

U.S. employers are anticipating 3.5% average “total salary” increase budgets for 2027 after doling out 3.4% actual increases this year. That’s according to the Mercer QuickPulse U.S. Compensation Planning Survey report, published Monday, Aug. 31, by Marsh.

(The professional services firm announced Thursday, Aug. 27, that Mercer, its people and investments business, will change over to the Marsh brand name on Tuesday, Sept. 1.) 

The 3.5% total salary figure encompasses merit increases, promotion pay, cost-of-living adjustments and other modifications. Base salary merit increases for 2027 were pegged at 3.2%.

The Mercer/Marsh numbers have shown compensation budget stability over the past three years after post-pandemic spikes in 2022 and 2023 (see table below).

Just over 1,000 organizations participated in the most recent QuickPulse survey.

The report’s data points for 2027 U.S. projections and 2026 actuals resemble those found in other recently released salary budget survey reports (see table below). (Check back to the Workspan Daily site in the coming weeks for articles on additional salary budget survey reports.)

Segmenting by Sector

According to the Mercer/Marsh report, average increase budgets will vary by industry.

When it comes to total salary, high tech (3.8%), banking (3.7%) and non-financial services (3.6%) lead the way, while healthcare services (3.2%), retail and wholesale (3.2%), and consumer goods (3.1%) lag.

The breakdown is similar for merit increases, with high tech (3.8%), banking (3.7%), energy (3.6%), insurance/reinsurance (3.6%) and non-financial services (3.6%) at the front, and healthcare services (3.0%), retail and wholesale (3.0%), and consumer goods (2.9%) trailing.

Accounting for Economics

The survey respondents intimated that some wiggle room may exist between their current predictions and those that will show up in the final budget and eventual dispersal.

Among the respondents:

• 87% said their 2027 salary budgets were still preliminary, with data collection underway;
• 8% had proposed budgets to leadership; and,
• 5% already had secured approval.

Fifty-seven percent said economic factors could have at least a moderate impact on their compensation decisions (11% said it could have a significant impact). Another 19% didn’t know the degree to which economic factors could impact their compensation decisions. In general, though, respondents said they are seeking to balance economic pressures with a focus on talent development, market competitiveness and hiring.

Tauseef Rahman, Marsh’s U.S. workforce reward solutions leader, summed up the pay picture, stating, “If projections hold, and historically they have, this will mark four consecutive years of moderate compensation increases. Economic uncertainty is top of mind for employers this year, and compensation dollars are tight. To make the most of their budgets, employers should take a targeted approach, scrutinizing each compensation dollar and using data to direct increases where workforce needs and talent risk are the greatest.”

AI’s Influence on Compensation Plans

The survey found compensation professionals are leaning into artificial intelligence (AI) and automation to an increased degree to help with planning. Seventy percent of responding organizations said they use at least some automation in compensation, but only 1% said they have reached advanced levels of transformation. Respondents are most often using AI for:

• Job matching or leveling (53%);
• Market pricing recommendations (38%);
• Pay equity analysis (13%); and,
• Manager decision support tools (12%).

“The barrier [to greater utilization and deeper outcomes] isn’t interest — it’s governance, data quality and system integration,” Rahman said. “Once employers address these and other factors, AI can transform the compensation function, freeing up capacity for greater human thought and impact.”

Made for Modifications

The report also showed corporate human capital plans account for a bit of flexibility:

• 41% of responding organizations said they promote employees as needed, versus at specific times during the year. All total, respondents predicted they will promote 8.4% of their employee population, on average, in 2027 — a percentage that is slightly less than in 2026 (8.6%) and 2025 (9.9%).
• Off-cycle salary adjustments are a regular compensation management consideration, as 64% said they have provided them or will provide them in 2027.

Top-level results from the WorldatWork 2026-2027 Salary Budget Survey report are now available to the general public. The full report — covering base salary increases and merit budgets for 24 countries/geographic regions and in-depth salary budget insights for the U.S., Canada, India and the United Kingdom — also is now available for purchase. Report purchase also provides access to the U.S./Canada Online Reporting Tool to build customized reports based on industry, organization size and/or geographic area.

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 Compensation
• Finance and Budgeting
• Total Rewards