WorldatWork: Employers’ 2027 Pay Budget Projections Point to Stability

U.S. employers are projecting mean salary increase budgets of 3.6% in 2027 to stay competitive in the labor market, reflecting general year-over-year stability but marking the fourth consecutive year without a higher annual projection. That’s according to WorldatWork’s 2026-2027 Salary Budget Survey of HR and Rewards leaders from 1,799 participating organizations. The professional association released its topline results, with data covering 4,733 submissions, on Wednesday, July 15.

The new research also revealed 2026 actual mean salary increase budgets in the U.S. averaged 3.6%, which matched the 3.6% increases employers projected for 2026 in the previous year’s survey.

On a global scale, respondents from most countries reported status-quo or reduced projections. Of the 24 primary countries/geographic regions:

Thirteen had 2027 projections that were slightly less than their 2026 actuals.
Seven had projections that matched this year’s actuals.
Four projected slightly higher outlays than this year’s actuals.

WorldatWork’s survey, the 53rd in the association’s storied history, opened in March 2026 and closed in May. For the study, total salary increase budgets are defined as the sum of merit, general/cost-of-living-allowance (COLA) and other increase budgets.

The WorldatWork data was in line with that from consulting firm WTW’s report (released on Wednesday, July 15), which predicted 3.4% U.S. salary increase budgets for 2027, compared to 3.5% for its 2026 projection and 3.5% for its 2026 actual. (Check back to the Workspan Daily site in the coming weeks for articles on additional salary budget survey reports.)

Get the new WorldatWork Report
Top-level results from the 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 — will be available for purchase in early August. 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.

Get the new WorldatWork Report

Top-level results from the 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 — will be available for purchase in early August. 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.

Historical Perspective

Absent major economic/political/social disruptions, predicted and actual mean percentages in the U.S. tend to track closely over time, as seen in the table below. While the WorldatWork report’s 2027 projection trails the highs seen for 2023 through 2025 (and continued a recent string of stability or slight pullback), it remains more robust than the general 3% projections that were prominent for most of the past decade-plus.

Year	Predicted Mean U.S. Salary Increase Budget	Actual Mean U.S. Salary Increase Budget
2027	3.6%	—
2026	3.6%	3.6%
2025	3.8%	3.7%
2024	4.1%	3.9%
2023	4.3%	4.4%
2022	3.3%	4.2%
2021	2.9%	3.0%
2020	3.3%	2.9%
2019	3.2%	3.2%
2018	3.1%	3.1%
2017	3.1%	3.0%
2016	3.1%	3.0%
2015	3.1%	3.0%

Competitive and Consistent Compensation

WorldatWork content and research leaders used the word “stability” to best summarize the compensation strategies for American and global employers. In fact, Sue Holloway, a content director at WorldatWork, said “a new equilibrium” may be in place.

“This year’s results, particularly for the U.S., reflect a labor market that has largely stabilized after several years of workforce disruption, talent shortages, elevated turnover and accelerated wage growth,” she said. “Employers are no longer reacting to the urgency that characterized the post-pandemic labor market, but they’ve also not returned to the much lower salary increase budgets that were common before 2020. Instead, salary increase budgets appear to have reached a new equilibrium, holding relatively steady. In light of continued economic uncertainty, employers are budgeting carefully, but they still recognize the need to invest in pay to attract and retain critical talent.”

The above-average spending of some employers contributed to the general steadiness, according to Sajani Fernando, WorldatWork’s senior specialist for survey research analysis.

“We saw quite a bit of stability in the data, which is what we expected to see, but the median figures, overall and by workforce group, signal a more conservative approach,” she said. “Twenty of the 24 studied countries reported higher means than medians, and the remaining four (China, Ireland, Brazil and South Korea) reported almost identical means and medians. This tells us two things: 1) the typical organization is budgeting at or below the average in nearly every country; and 2) a small group of organizations with big budgets is holding the averages up.”

A Glimpse at Worker Type

Breaking down the data by employee classification, the WorldatWork survey showed generally the same trend lines for hourly and salaried workers. In the U.S., increases for workers classified as:

Non-exempt salaried are projected to be 3.6% in 2027, versus a 3.7% actual for 2026.
Exempt salaried are 3.6% for 2027, versus a 3.7% actual for 2026.
Non-exempt hourly non-union are 3.5% for 2027, versus a 3.6% actual for 2026.
Officers/executives are 3.6% for 2027, the same figure as the 2026 actual.

Some similarities occurred in most other countries represented by survey respondents. However, non-exempt hourly non-union workers generally fared better than those in the other work groups (see table below).

Work Group	Countries with 2027 Projection Higher Than 2026 Actual	Countries with 2027 Projection Lower Than 2026 Actual	Countries with 2027 Projection the Same as the 2026 Actual
Non-exempt hourly non-union	13	6	5
Exempt salaried	5	14	5
Non-exempt hourly non-union	2	19	3
Officers and executives*	5	9	3

* = Not enough data was present for this work group in seven countries.

Spanning the Globe

Additional global snapshots and storylines from the survey include:

Canadian consistency. Canadian HR and Rewards professionals predicted 2027 salary increase budgets would average 3.5%, versus the 3.5% projection and 3.5% actual for 2026.
India’s eye-popping increases. Indian organizations projected the largest 2027 average salary increase budget in the survey — 9.2%. This figure is higher than the 8.8% predictions for 2026 but below the 9.3% actual for the year.
Mexico still on the go. Respondents from this country eyed 5.0% average salary increase budgets for 2027. Only four countries (India, Poland, South Africa and Vietnam) had higher projections.
U.K. is OK. Survey participants from the United Kingdom projected 3.7% average salary increase budgets for 2027, just under the 3.8% projection and actual for 2026.

Internalizing the Data

Given all the numbers and trend lines, what are the new report’s biggest takeaways for HR and Rewards professionals? According to Holloway, it comes down to these items:

Salary increase budgets have indeed stabilized, but the need for strategic pay decisions has not.
Leaders should be strategic and not complacent. With U.S. salary increase budgets settling at roughly 3.6%, the challenge now shifts from determining how much to spend to determining where to invest limited salary dollars for the greatest talent and business impact.
As labor market conditions continue to evolve and economic uncertainty persists, HR must remain disciplined in monitoring market data and aligning pay investments with both talent priorities and business objectives.

Access Past Coverage of WorldatWork’s Survey

For additional perspective on how this year’s storylines track with those from recent years, check out Workspan Daily’s coverage of previous WorldatWork Salary Budget Survey results: