US Employers Stick With Moderate Pay Increases for 2027, According to Marsh’s Mercer QuickPulse® Survey

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NEW YORK--(BUSINESS WIRE)-- Marsh (NYSE: MRSH), a leading global professional services firm, today released the results of its July 2026 Mercer QuickPulse® US Compensation Planning Survey. Mercer, a people and investments leader, is transitioning to the Marsh brand in September.

The survey of 1,001 U.S. organizations found that employers on average plan to set base salary merit increases at 3.2% and total salary increases at 3.5% in 2027—including merit, promotions, cost-of-living, and other adjustments—roughly in line with the actual increases employers reported in 2024, 2025, and 2026.

Industry budgets vary. High Tech (3.8%), Banking (3.7%), Energy (3.6%), Insurance/Reinsurance (3.6%), and Non-Financial Services (3.6%) set the largest merit budgets, while Consumer Goods (2.9%), Healthcare (3.0%), and Retail (3.0%) lagged the market for merit budgets.

Economic uncertainty continues to shape compensation

Looking ahead, employers say the economy will continue to influence compensation decisions in 2027, with more than half (57%) expecting at least a moderate impact. At the same time, organizations are balancing those pressures with a focus on talent development, market competitiveness, and hiring.

Many employers are still finalizing their budget decisions. As of July 2026, 87% of organizations said their 2027 salary budgets were still preliminary with data collection underway, while 8% had proposed budgets to leadership and only 5% had already secured approval.

“If projections hold, and historically they have, this will mark four consecutive years of moderate compensation increases,” said Tauseef Rahman, Marsh’s US Workforce Reward Solutions Leader. “Economic uncertainty is top of mind for employers this year, and compensation dollars are tight. To make the most of their budgets, employers should take a targeted approach, scrutinizing each compensation dollar and using data to direct increases where workforce needs and talent risk are the greatest.”

Promotions and off-cycle pay are still in play

Promotions and off-cycle pay continue to play an important role in total rewards and career progression. Employers expect to promote about 8.4% of their workforce in 2027, down slightly from 8.6% in 2026 and 9.9% in 2025.

Off-cycle salary adjustments also remain a regular part of compensation management, with 64% of organizations saying they have provided them or will provide them in 2027, showing that compensation decisions continue well beyond the annual merit cycle.

AI’s increasing role in compensation

The survey also found that AI and automation are becoming more common in compensation planning, although most organizations are still in the beginning of their journeys. Nationally, 70% of organizations report at least some automation in compensation, while only 1% say they have reached advanced levels of transformation. AI is most often used for market pricing recommendations and benchmarking (53%), salary increase recommendations (50%), and job matching and leveling (49%).

“AI is widely used for basic tasks such as market pricing a job or determining a new job’s level within the organization, but it’s not yet having a substantial impact on the compensation function,” added Mr. Rahman. “The barrier isn’t interest; it’s governance, data quality, and system integration. Once employers address these and other factors, AI can transform the compensation function, freeing up capacity for greater human thought and impact.”

About the Mercer QuickPulse® US Compensation Planning Survey

The 2026 Mercer QuickPulse® US Compensation Planning Survey includes data from 1,001 organizations in the US across 15 industries, with employee bases ranging from small to very large. This study was fielded in mid-July 2026. More information can be found here.

About Marsh

Marsh (NYSE: MRSH) is a global leader in risk, reinsurance and capital, people and investments, and management consulting, advising clients in 130 countries. With annual revenue of $27 billion and more than 95,000 colleagues, Marsh helps build the confidence to thrive through the power of perspective. For more information, visit marsh.com, or follow us on LinkedIn and X.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260831605409/en/

Media contact:

Cassie Lenski
+1 214-220-6227
Cassie.Lenski@marsh.com

Source: Mercer