Employers plan 3.5% average pay increase in 2027
Employers are moving away from across-the-board salary increases, also known as ‘peanut butter’ raises, in favor of performance-based pay.
Just 32% of organizations plan to use this approach in 2027, down from 36% in 2026.
The average pay increase is expected to be 3.5% in 2027, up from 3.4% in 2026, which is on par with inflation but lower than the 4.8% average increase in 2023.