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Previous 2025 salary surveys revealed the following: ;WorldatWork (released July 31): 3.8% mean salary increase budgets for 2025; 3.9% actual mean increase budgets in 2024.; ;Payscale (July 31): 3.5% average pay raises for 2025; 3.6% actual increases in 2024.; ;Conference Board (Sept. 8): 3.9% average salary increase budgets for 2025; 3.8% actual budgets in 2024.; ;WTW (Dec. 18): 3.7% salary increase budgets for 2025; 3.8% average increase budget in 2024.; The latest figures from Mercer reflect a decline from November 2024 projections , where U.S. employers anticipated 3.3% for merit increases and 3.7% for total increases for non-unionized employees.

Inflation’s Influence on Compensation The last time we saw a U.S. salary increase budget number at or above 4% was 2007, and the only time we have seen more than a 1% increase in salary budgets since we began tracking them in 1980.

Understanding lasers and how they affect stop-loss policies can help total rewards (TR) professionals prepare to negotiate these contracts and maintain a more predictable health plan budget.

Access a related Workspan Daily article on this subject: ‘Year of Contention’: Employers Mull Tight Budgets, Pay Expectations; Where Employers Are Cutting Payscale’s latest Compensation Best Practices Report found organizations are reducing costs in certain areas: ;Pay increases (18%); ;Salary offers (14%); ;Hiring less experienced talent (15%); “The most visible cuts are in salary budgets, back toward that 3% level that no longer builds in inflation-fueled increases,” Scott-Wears said.

For WorldatWork Members 2025-2026 Salary Budget Survey , research;Salary Budget Planning Guide , tool;Salary Budget Planning: Using Market Data to Formulate a Recommendation Report , tool;Compensation Structure Policies and Practices , research;The Potential Dangers of Aggregated Statistics , Journal of Total Rewards article; For Everyone WorldatWork: 2026 Salary Increase Budgets Project U.S., Global Caution , Workspan Daily article;Salary Budget Planning Playbook: Data, Strategy and Insights for the Year Ahead , webinar, live event Aug. 19;‘Year of Contention’: Employers Mull Tight Budgets, Pay Expectations , Workspan Daily article;Essentials of Compensation Management , course; U.S.

As organizations plan their budgets in 2026, they are facing several challenges, from tighter budgets and a cooling labor market to the acceleration of AI adoption.

HR professionals, acknowledging workers’ financial concerns while struggling to balance tighter budgets, listed increasing revenue and reinforcing the full value of total rewards packages as strategies they plan to employ moving forward, according to a recent report from the Society for Human Resource Management (SHRM).

The Digital Advantage: Budgeting in the Age of AI Today’s retirees have more control over their budgets than any previous generation.

Despite murky economic conditions, organizations are still elevating their sales compensation budgets.

Additionally, the study found 63% of private sector workers at small firms (defined as those with fewer than 50 employees) are estimated to lack access through their workplaces, compared to 34% at larger firms (defined as those with 50 or more employees).