Employers Predict Moderate Pay Increases for Fourth Consecutive Year, Surveys Find

HR Dive · United States · Sep 3, 2026

U.S. employers expect base salary merit increases of 3.2% and total salary increases of 3.5% in 2026, marking four consecutive years of moderate compensation growth, according to a Marsh survey of more than 1,000 companies. Economic uncertainty is constraining compensation budgets, with nearly 6 in 10 employers saying the economy will have at least a moderate impact on pay decisions. To stretch budgets, employers are increasingly relying on targeted, data-driven approaches and off-cycle salary adjustments — 64% said they had provided or planned to provide such adjustments. AI adoption in compensation planning remains nascent, with only 1% of organizations reporting advanced automation capabilities.