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With cost containment a looming influence, new research finds that when it comes to salary increase budgets for 2026, few organizations are planning any big changes.
WTW’s most recent Salary Budget Planning Report uncovered that the average salary increase budgets for U.S. companies are expected to remain flat next year at 3.5%, the same as the actual budgets of 2025.
WTW’s Rewards Data Intelligence practice conducted the survey this spring across 157 countries worldwide, with more than 29,128 responses, including nearly 1,600 from the U.S.
While most organizations weren’t anticipating a change in budget, according to WTW’s Brittany Innes, director, Rewards Data Intelligence, 31% of those surveyed are projecting lower salary increase budgets than last year. Of those, the most common reasons cited include an anticipated recession or weaker financial results and concerns related to cost management. Of the minority projecting higher salary increase budgets, most pointed to tight labor markets and inflationary pressures.
What are orgs doing in light of stagnant salary increase budgets?
Even without big salary increases, employees are staying put. According to WTW, fewer organizations this year found employee stability challenging compared to the past two years. Less than one-third of organizations (30%) reported difficulty attracting
