2026 raises expected to hold steady, compensation leaders report
Summary
The Conference Board’s report (Sept. 3) finds pay raise budgets for 2026 are set to mirror 2025, with companies planning an average salary-budget increase of 3.4% next year. Actual pay increases in 2025 averaged 3.4% — below last year’s 4% forecast but above pre-2020 norms of about 3%.
Organisations are treating the current labour market as one of recalibration rather than retreat: slowing headcount growth, targeting investment in critical skills and internal upskilling, and reallocating salary dollars to roles that “move the needle.” The report also notes a shift from one-time discretionary payments (sign-on and retention bonuses) toward performance and incentive pay, while promotions and market/internal equity adjustments are expected to decline.
The findings align with similar industry surveys (Payscale and WTW) that show broadly flat salary budgets at roughly 3.4–3.5% for 2026. The Conference Board surveyed more than 460 U.S. compensation leaders for its insights.
Source
Source: https://www.hrdive.com/news/2026-raises-to-hold-steady-compensation/759671/
Key Points
- Average salary-budget increase projected at 3.4% for 2026, matching 2025.
- 2025 actual pay increases averaged 3.4%, below the 4% forecast made last year but above pre-pandemic averages.
- Employers are reallocating pay spend to critical skills and internal upskilling rather than broad across‑the‑board raises.
- There is a move away from one‑time discretionary pay toward performance and incentive-based compensation.
- 59% of surveyed compensation leaders plan to use “other” budgeted base-pay increases in 2026 (up from 56% in 2025); use of promotions and market/equity adjustments is expected to decline.
- Conference Board results are consistent with Payscale and WTW reports showing similar, largely flat salary budgets (~3.4–3.5%).
Why should I read this
Short and useful: if you’re planning pay budgets, reward programmes or workforce strategy for 2026, this tells you what to expect — headline increases will be steady, but money will be targeted. We read the report so you don’t have to; use this as a quick steer on where to focus pay decisions and communications.