Anxiety about the economy forcing U.S. employers to yank budgets for raises
7 days ago
- #HR strategy
- #salary trends
- #economic impact
- US employers are expected to grant average pay raises of 3.5% in 2026, slightly down from 3.6% in 2025.
- Economic concerns, including inflation and tariffs, are driving smaller compensation budgets.
- 66% of employers reducing salary budgets cite worries about future economic conditions.
- Inflation reached 2.7% in June, impacting business hiring and wage decisions.
- Workers still feel the effects of past high inflation despite current wage growth exceeding inflation.
- HR should communicate economic context and industry trends to employees during pay discussions.
- Employers are advised to allocate raises strategically, focusing on retaining key talent in low-demand sectors like tech.