Salary Research & Pay Bands in 2026: Navigating a Year of Cautious Budgets & Bold Skills

Recruiting in 2026 will not come with a crystal ball, despite what the AI and its proponents tell you. It does come with receipts. In a hiring landscape where inflation isn’t done yet, new hires often earn more than veterans and lawmakers are turning pay ranges into public information, it’s not enough to wing your compensation strategy. You need data, structure and a healthy dose of pragmatism.

This deep dive covers why salary research and structured pay bands matter now more than ever, what new pay‑transparency rules are on the horizon, and how talent acquisition teams can navigate everything from wage compression to EU legislation without losing their minds.

Salary budgets: lower but still competitive

Let’s start with the numbers. After year-over-year 4%+ raises, salary increase budgets are contracting. Grant Thornton’s compensation planning report notes that U.S. organizations project mean salary increases of 3.6 % in 2026, down from 3.7 % in 2025 and 3.9 % in 2024. The range across industries is 3.2 %–3.5 %, still above the pre‑pandemic norm but signalling a more reserved approach for the upcoming year.

Why the pullback? With slower and less ambitious hiring cycles, voluntary attrition is at historic lows. HRMorning’s salary‑budget survey reports that 68 % of companies expect 2026 pay budgets to be roughly the same as 2025. Employers are holding onto cash, unsure if inflation will spike or the economy will wobble. Despite this caution, most organizations still plan to award raises across employee groups - 85 % of exempt management workers and 83 % of non‑exempt staff are slated for increases

Specialized skills remain at a premium

Moderating salary budgets don’t mean tech workers are losing leverage - far from it. According to Robert Half’s 2026 Salary Guide, 84 % of hiring managers are offering higher salaries to candidates with specialized skills, and the largest projected salary gains are - you guessed it - in artificial intelligence, machine learning and data science. LLM proficiency translates into ability to write your own checks, especially at the FAANG level of talent.

The same survey shows that 88 % of professionals feel confident negotiating their pay. They should be - hiring managers know that specialized talent drives revenue. At the same time, 66 % of candidates say they’d return to the office full‑time for a higher salary, with 60 % demanding at least a 10 % raise to do so. Remote vs in‑person pay is becoming a negotiation point rather than a default perk.

Pay transparency - ready or not

If you thought you could quietly fix budgets behind closed doors, think again. Pay transparency legislation has multiplied faster than HR can update compensation frameworks. HR Dive reports that 14 U.S. states and four Canadian provinces will require salary range disclosures by the end of 2025, and every EU country must comply with the Pay Transparency Directive by mid‑2026. The more important number to note here - 75 % of employers aren’t prepared to comply.

The same survey found that 81 % of employers include salary ranges in job listings, but 63 % don’t share ranges with current employees. Of the 37 % that do, 61 % only disclose pay where legally mandated. Translation: transparency is being dragged into the light, and it’s not always voluntary. Failing to comply will absolutely sting: U.S. states like California can fine up to $10,000 per violation, while individual EU members like the Netherlands will levy similar amount, but in €€€.

Salary structures and pay bands: update or risk compression

Salary bands and grades are the structural plumbing of compensation. They define the minimum, midpoint and maximum pay for roles and help maintain internal equity. Yet pay structures can become stale quickly, especially in tech. HRMorning notes that 64 % of U.S. employers review and adjust salary structures annually, while others revisit them every two or three years.

Failing to update pay bands leads directly to pay compression, where long‑tenured employees earn the same as new hires. Inflation alone poses a major challenge to such practice, let alone a multitude of other micro and macro effects. Left unchecked, it destroys morale and sparks attrition. When your teammates crack jokes about getting a raise by way of quitting and coming back - those aren't really jokes, they are pay compression problems.

Practical tips for 2026

1. Map your market, don’t guess. Use up‑to‑date salary surveys and labor‑market analytics to set pay bands. The days of copying a competitor’s range, or going by gut feeling are no more.

2. Review your bands annually. With inflation and talent movement, annual updates help prevent compression and keep your ranges fresh and competitive.e

3. Be transparent - before it’s mandated. Proactively sharing salary ranges with employees builds trust and helps you get ahead of legislation. Remember, 75 % of employers currently aren’t ready for pay transparency, and you should be.

4. Reward specialized skills. Even with lower budgets, skills in AI, cybersecurity and data engineering command premiums. Create skill tiers or project‑based bonuses to avoid off‑cycle offers; if not, your run the risk of losing talent to better offers, or worse - to your competitors reverting to poaching techniques.

5. Use benefits strategically. Combine competitive pay with targeted benefits - financial coaching, flexible PTO or wellness allowances - to differentiate your offer from the market. Benefit costs are rising, but they can close gaps where cash cannot.

Closing thought

In 2026, salary research isn’t just about benchmarking numbers. It’s about balancing transparency, fairness and business reality. Pay budgets are cooling, but skills premiums are heating up. Pay transparency is no longer optional. And salary structures require constant care if you want to avoid the morale‑destroying effects of pay compression. Lean into data, communicate openly and remember: a thoughtful compensation strategy isn’t just a cost - it’s a competitive advantage.