Companies are standing firm on salaries

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Nice bonus, but no salary increase this year? You’re not alone.

Companies are increasing bonuses but standing firm on salaries, according to Korn Ferry’s most recent pulse survey on salary increase forecasts and AI’s impact on compensation, which covered responses from more than 4,250 organizations across 133 countries.

Nearly three-quarters (72%) of organizations expect to pay bonuses “at or above target” this year, but salary growth isn’t unfolding in the same way.

“Across most major markets, there is a slight decrease in 2026 total salary increases [versus] our last survey in late 2025, reflecting a more conservative view on increasing fixed compensation costs in 2026,” the survey’s authors wrote.

“Globally, annual salary increases are received by most employees in a majority of organizations. In 2026, 35% anticipate providing increases to at least 95% of their employees,” they continued. “75% of organizations anticipate providing increases to at least 80% of their employees.”

Those figures “are lower than reported last year, indicating a more selective process in salary increase eligibility,” the authors added.

The study found the median base salary increase for employees and senior management in the US was 3% this year, with middle managers receiving a 3.1% increase.

In this landscape, incentive compensation continues to be “a key lever in talent retention,” per the report.

Notably, the authors also expect demand for AI skills to increasingly put a strain on traditional pay models.

“Compensation differentiation for critical talent will increase,” they wrote. “Premium pay for specialized AI skills and AI-ready leadership will grow. This will require the emergence of new pay models to support the organization along its AI transformation.”

Some companies are already using sign-on incentives and retention bonuses to attract specialized AI talent. “The market is varying greatly, but the most common premium AI-related talent receives is typically 10%–15% above peer roles,” they wrote.