Are Pay Raises Keeping Up With Inflation? 2026 Labor Market Trends

Are employee pay raises actually keeping up with inflation in 2026? Claudia St. John, Founder & CEO of The Workplace Advisors, shares an early look at the trends every employer should be watching.

Ahead of our semi-annual Labor Market Survey Report, Claudia breaks down where compensation, benefits, and hiring are heading this year, and what it means for your workforce strategy.

In this update:

• Why pay increases are landing around 3.5% — down from the Great Resignation’s 5–6%
• How high inflation is quietly eroding the value of those raises
• Why more employers are turning to variable pay: spot, annual, and performance bonuses
• The growing shift toward enriching benefits instead of base pay
• What employees want most right now: stability and job security
• Why the widely forecast layoffs haven’t materialized outside of IT, high-tech, and banking
• How a compensation analysis tells you whether you’re competitive in your market and geography

Whether you’re at the 75th percentile or the 30th, there are smart ways to attract and keep great people. Let’s talk through yours.

Want a compensation check-in? Email us: hello@theworkplaceadvisors.com

Learn more: https://www.theworkplaceadvisors.com

Connect with us!
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E-mail:
claudia@theworkplaceadvisors.com

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Website:
http://www.theworkplaceadvisors.com

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LinkedIn:
https://www.linkedin.com/in/claudiastjohn/
https://www.linkedin.com/company/theworkplaceadvisors

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The Advice Bites blog delivers practical, tactical, and informative guidance about the biggest workplace trends, and thoughtful insights about how you can apply them to your business.