Comp and Coffee Salary budgets are shifting — here’s how to stay ahead
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Sep 18, 2025 Amy Stewart, Principal of Research & Insights at Payscale, and Kathryn Gombos, HR and total rewards expert, share insights on shifting salary budgets for 2026. They discuss how economic uncertainty is reshaping pay strategies and the importance of data for HR professionals. Kathryn emphasizes transparent communication and pay equity, while Amy highlights industry variations in salary trends. Together, they offer actionable steps for organizations to navigate budget changes and enhance their compensation strategies.
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Salary Budgets Are Cooling
- Salary increase budgets are dipping slightly for 2026 after pandemic-driven volatility.
- This cooling follows a return toward pre‑COVID norms despite inflation remaining above target.
Economic Uncertainty Tops Concerns
- Economic uncertainty has overtaken competition for talent as the top driver of budget changes.
- Organizations cite stagnant hiring and weak job growth as key reasons to tighten increases.
Prioritize Pay By Strategy And Risk
- Anchor budget decisions to your company's strategy and conduct market and pay equity assessments.
- Use those findings to prioritize retention risks and critical roles for targeted increases.