Despite the current economic turbulence, most employees in a majority of companies will be getting a base salary increase for 2027, according to a large survey by Korn Ferry.
Almost half (47%) of the 5,512 participating employers said they expect to provide salary hikes to at least 95% of their employees, while 79% expect to do so for at least 80% of employees. Only 2% said they are planning no increases for anyone.
U.S. organizations expect to boost overall base-salary budgets next year by an average of 3.3% and a median of 3%. The median increase for U.S. executive and senior management is also anticipated to come in at 3.0%.
The survey was conducted in June of this year.
Korn Ferry advised companies to take a disciplined approach with their salary structure. “With most organizations in moderate growth or mixed-signal conditions, rewards leaders should resist both boom-time generosity and downturn austerity, and instead design for disciplined, scenario-based flexibility,” the firm wrote in its survey report.
Among 135 countries represented by the participants, employees in Egypt, Ukraine and India will see the greatest overall average salary increases (15.7%, 10.0% and 8.3%, respectively). The lowest will be in Switzerland (1.7%) and France (2.6%).
As for incentive-payout budgets, half (49%) of survey participants are projected to finish approximately at target or budget levels for the current fiscal year, up from 38% a year ago.
However, 37% said payouts are expected to be below target/budget or not paid out at all, and only 14% said payouts would top last year’s totals, compared with 25% who said so last year.
Still, Korn Ferry characterized those results as indicating “generally stable financial performance.”
“Stable bonus expectations give organizations permission to keep incentives credible but also raise the bar for ensuring payouts are visibly tied to performance, productivity, and transformation outcomes,” the report said.
Meanwhile, the survey also inquired about the impact of economic uncertainty on talent and rewards programs over the previous 12 months and the following 12 months. The highest-impact area was increased use of artificial intelligence, with 74% of survey respondents reporting an increase.
“AI is no longer a technology issue for rewards — it is a new operating context for pay, skills, mobility and job architecture, and organizations that treat it as a side topic will quickly find their reward models obsolete,” Korn Ferry wrote.
Workforce capability building was another priority, with 65% of organizations boosting their reskilling and critical development efforts. And 60% said they’re increasing their focus on career development and internal mobility.