Companies Maintain Steady Salary Increase Budgets Amid Economic Uncertainty
US companies are planning to keep salary increase budgets steady at a median of 3.5% in 2027, unchanged from the previous year. The Conference Board's annual survey shows that while overall pay increases remain flat, employers are becoming more selective with compensation dollars due to economic uncertainty and shifting priorities. A growing emphasis is being placed on skills such as AI and machine learning, which drive base-pay adjustments for 38% of organizations—more than any other skill category. However, formal salary structures have not kept pace; over two-thirds still tie pay ranges strictly to job roles rather than in-demand skills. Employers are also facing limited flexibility with 'other' increase budgets at just 0.5%, affecting areas like promotions and retention. The survey highlights a broader transformation in the workforce as AI adoption accelerates, alongside an increasing need for leadership and people-management capabilities. While headcount is expected to remain stable or grow slightly (31% of companies), employers are restructuring roles through automation and upskilling initiatives.
Topics: AI skills compensation salary increases workforce transformation