Core Insights - Average salary increase budgets for US companies in 2026 are expected to remain stable at 3.5%, matching the actual increases of 2025 [1] - Organizations are becoming more strategic in their pay allocation and investment focus, aiming to align with broader business goals despite economic uncertainty [3] Salary Budget Changes - Three out of five organizations experienced changes in their salary budgets during the last pay cycle, with 53% reporting no difference between anticipated and actual budgets for 2025 [2] - Among organizations projecting lower salary increases, 51% cited anticipated recession or weaker financial results, while 45% mentioned cost management concerns [2] - Tight labor markets (59%) and inflationary pressures (30%) were the main reasons for those projecting higher salary budgets [2] Employee Retention and Stability - Employee stability has improved, with less than one-third (30%) of organizations reporting challenges in attracting or retaining employees, a decrease of 11 percentage points since 2023 [4] - Organizations are taking actions to enhance employee experience, health and wellness benefits, and training opportunities in response to low turnover and concerns about burnout [5] Compensation Adjustments - Employers are adjusting compensation programs to address competitive labor markets and inflation, with 50% conducting a compensation review of all employees and 48% reviewing specific employee groups [6] - Over 40% of organizations have enhanced their use of retention bonuses or spot awards, and 37% have targeted base salary increases for specific employee groups [6] Payroll Expenses - The average annual payroll expense has increased by nearly 4% (3.6%), with 70% of organizations reporting higher total annual payroll expenses compared to the previous year [7] Strategic Investments - Employers are making investments beyond pay raises, focusing on career development, wellbeing, flexibility, and equity to enhance performance, retention, and resilience in a changing market [8] Survey Details - The Salary Budget Planning Report was compiled by WTW's Rewards Data Intelligence practice, with approximately 29,128 responses from companies across 157 countries, including 1,569 from the U.S. [9]

Trump threatens to set Doge on Musk as pair feud again over budget plan https://t.co/twSj3C5L4m ...