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Most US employers not budging on budgets, salary increases remain flat

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WTW (NASDAQ: WTW) reports that US salary increase budgets for 2026 are expected to remain flat at 3.5%, matching 2025 levels. The study reveals that 53% of organizations maintained their anticipated pay budgets in 2025, while 31% project lower increases due to recession concerns and cost management.

Employee retention has improved, with only 30% of organizations reporting difficulty in attracting or retaining talent, down 11 percentage points since 2023. Companies are responding through various initiatives, including enhanced employee experience (47%), improved health benefits (43%), and increased training (40%). The average annual payroll expense increased by 3.6%, with 70% of organizations reporting higher total payroll costs than last year.

WTW (NASDAQ: WTW) comunica che i budget per gli aumenti salariali negli Stati Uniti per il 2026 dovrebbero rimanere stabili al 3,5%, in linea con i livelli del 2025. Lo studio evidenzia che il 53% delle organizzazioni ha mantenuto invariati i budget salariali previsti per il 2025, mentre il 31% prevede aumenti più contenuti a causa di preoccupazioni legate alla recessione e alla gestione dei costi.

La fidelizzazione dei dipendenti è migliorata, con solo il 30% delle organizzazioni che segnala difficoltà nell’attrarre o trattenere talenti, una diminuzione di 11 punti percentuali rispetto al 2023. Le aziende rispondono con diverse iniziative, tra cui il miglioramento dell’esperienza dei dipendenti (47%), benefici sanitari potenziati (43%) e maggiori investimenti nella formazione (40%). La spesa media annua per il personale è aumentata del 3,6%, con il 70% delle organizzazioni che segnala costi salariali totali più elevati rispetto all’anno precedente.

WTW (NASDAQ: WTW) informa que los presupuestos para aumentos salariales en EE. UU. para 2026 se esperan que se mantengan estables en un 3,5%, igualando los niveles de 2025. El estudio revela que el 53% de las organizaciones mantuvo sus presupuestos salariales previstos en 2025, mientras que el 31% proyecta aumentos menores debido a preocupaciones por la recesión y la gestión de costos.

La retención de empleados ha mejorado, con solo el 30% de las organizaciones reportando dificultades para atraer o retener talento, una disminución de 11 puntos porcentuales desde 2023. Las empresas están respondiendo con diversas iniciativas, incluyendo una mejor experiencia para el empleado (47%), mejores beneficios de salud (43%) y mayor capacitación (40%). El gasto anual promedio en nómina aumentó un 3,6%, con el 70% de las organizaciones reportando costos totales de nómina más altos que el año pasado.

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WTW (NASDAQ : WTW) rapporte que les budgets d’augmentation salariale aux États-Unis pour 2026 devraient rester stables à 3,5%, correspondant aux niveaux de 2025. L’étude révèle que 53% des organisations ont maintenu leurs budgets salariaux prévus en 2025, tandis que 31% prévoient des augmentations plus faibles en raison des inquiétudes liées à la récession et à la gestion des coûts.

La rétention des employés s’est améliorée, avec seulement 30% des organisations signalant des difficultés à attirer ou retenir les talents, soit une baisse de 11 points de pourcentage depuis 2023. Les entreprises réagissent par diverses initiatives, notamment une meilleure expérience employé (47%), des avantages santé améliorés (43%) et une formation accrue (40%). La dépense annuelle moyenne en masse salariale a augmenté de 3,6%, 70% des organisations rapportant des coûts salariaux totaux plus élevés que l’année précédente.

WTW (NASDAQ: WTW) berichtet, dass die Gehaltserhöhungsbudgets für 2026 in den USA voraussichtlich stabil bei 3,5% bleiben und damit das Niveau von 2025 halten. Die Studie zeigt, dass 53% der Organisationen ihre geplanten Gehaltsbudgets für 2025 beibehalten haben, während 31% aufgrund von Rezessionsängsten und Kostenmanagement geringere Erhöhungen erwarten.

Die Mitarbeiterbindung hat sich verbessert, da nur 30% der Organisationen Schwierigkeiten bei der Gewinnung oder Bindung von Talenten melden, was einem Rückgang um 11 Prozentpunkte seit 2023 entspricht. Unternehmen reagieren mit verschiedenen Maßnahmen, darunter verbesserte Mitarbeitererfahrungen (47%), bessere Gesundheitsleistungen (43%) und mehr Schulungen (40%). Die durchschnittlichen jährlichen Personalkosten stiegen um 3,6%, wobei 70% der Organisationen höhere Gesamtkosten als im Vorjahr melden.

Positive
  • Employee retention has improved with 11 percentage point decrease in organizations reporting talent difficulties
  • Organizations are investing in employee experience (47%) and health benefits (43%)
  • 70% of organizations maintain ability to increase payroll expenses despite economic uncertainty
Negative
  • Salary increase budgets remain flat at 3.5% for 2026
  • 31% of organizations project lower salary budgets due to recession concerns
  • Average annual payroll expenses increased by 3.6%, pressuring company costs

NEW YORK, July 08, 2025 (GLOBE NEWSWIRE) -- Average salary increase budgets for US companies in 2026 are expected to remain stable at 3.5%, matching 2025’s actual increases. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

Three out of five organizations saw their salary budgets change in the last pay cycle. More than half (53%) of these organizations reported no change between their anticipated and actual pay budgets in 2025. For the nearly one-third (31%) of these organizations that are projecting lower salary increase budgets than last year, the most common reasons cited are an anticipated recession or weaker financial results (51%) and concerns related to cost management (45%). Tight labor markets (59%) and inflationary pressures (30%) are the most commonly cited reasons for change among the relatively few organizations that are projecting higher salary increase budgets.

“While top-line budgets are generally holding steady, the real shift is happening beneath the surface. Organizations are being more deliberate about how they allocate pay, where they focus investment and what outcomes they expect to drive. Employers are no longer simply reacting to economic signals; they’re reimagining how to best support broader business goals despite uncertainty,� said Brittany Innes, director, Rewards Data Intelligence.

Despite stable pay increases, employees are staying put. Fewer organizations this year have found employee stability challenging compared to the past two years. Less than one-third of organizations (30%) report difficulty attracting or retaining employees, representing a decrease of 11 percentage points since 2023.

In response to market conditions in which turnover is relatively low and burnout and disengagement remains a concern, organizations have taken a number of actions to support their workforce, including improving the employee experience (47%), enhancing health and wellness benefits (43%) and increasing training opportunities (40%).

Additionally, employers are adjusting compensation programs to address the competitive labor market and inflationary pressures. These actions have included conducting a compensation review of all employees (50%), performing a compensation review of specific employee groups (48%), hiring people higher in relevant salary ranges (45%) and raising starting salary ranges (40%). Over two-fifths of organizations (43%) have enhanced their use of retention bonuses or spot awards and 37% have targeted base salary increases for specific employee groups.

As organizations focus on these efforts, they continue to wrestle with higher annual payroll expenses. The average annual payroll expense increased by nearly 4% (3.6%), and 7 in 10 organizations report total annual payroll expenses higher than last year.

“As employers navigate continued economic uncertainty, ongoing increases in labor costs and the changing needs and expectations of employees, they are positioning themselves for what is to come and making investments in their workforces that go beyond pay raises. These include career development, wellbeing, flexibility and equity—because these are critical for performance, retention and resilience in a shifting market,� said Lori Wisper, managing director, Work & Rewards.

About the survey

The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from April to June of 2025. Approximately 29,128 responses were received from companies across 157 countries worldwide. In the U.S., 1,569 organizations responded.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

Media contacts:

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Stacy Bronstein


FAQ

What is the expected salary increase budget for US companies in 2026 according to WTW?

According to WTW's Salary Budget Planning Report, US companies expect salary increase budgets to remain stable at 3.5% in 2026, matching 2025's actual increases.

How many companies are projecting lower salary budgets for WTW's 2026 forecast?

31% of organizations are projecting lower salary increase budgets, primarily due to anticipated recession concerns and weaker financial results (51%) and cost management (45%).

What percentage of organizations are having difficulty with employee retention in 2025?

30% of organizations report difficulty attracting or retaining employees, representing an improvement of 11 percentage points since 2023.

How are companies responding to current market conditions according to WTW's report?

Companies are improving employee experience (47%), enhancing health benefits (43%), increasing training (40%), conducting compensation reviews (50%), and adjusting starting salary ranges (40%).

What is the average increase in annual payroll expenses reported in WTW's study?

The average annual payroll expense increased by 3.6%, with 70% of organizations reporting higher total payroll expenses compared to the previous year.
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