Payscale Survey: Employers Plan 3.5% Raises for 2027

A quick note before we get to this week’s main story, which looks at new survey data from Payscale on something we all care a lot about: pay raises.

This week is the last chance to get our preview pricing for the ERE Recruiting Innovation Summit. If you’re thinking about joining us (and I hope that you do!), register by Friday, August 14, before prices go up!

A recent survey of 1,266 organizations by Payscale found that U.S. employers gave a median base-pay increase of 3.4% in 2026. Raises in 2027 are expected to stay roughly the same, rising slightly to 3.5%. 

“We've seen pay increases hovering around that 3.5% mark now for at least the last two years,” said Ruth Thomas, chief compensation strategist at Payscale.

Coming on the heels of the Bureau of Labor Statistics’ nonfarm payroll employment numbers that showed the United States lost 23,000 jobs in July and the downward 103,000 revision to the May and June figures, this is yet another sign that the U.S. labor market is stuck in what Thomas calls a “period of economic and pay paralysis.”

Those raises are doing little for workers' buying power. Inflation ran as high as 4.2% this spring before easing back down in June, meaning that the median pay raise was actually a pay cut in purchasing power for much of the year. “The reality is that most employees do not feel things have got any cheaper, and affordability continues to be a real issue,” Thomas said. “This restrained pay growth continues to impact employees.”

This paralysis is causing a retention problem. One in four organizations surveyed say they are losing talent in 2026 because their pay increases are not big enough, and another 22% are unsure whether they are. Together, nearly half of employers either know or suspect that their raises are costing them people.

The survey offers a glimmer of hope for next year. Nearly a third of respondents expect their budget for pay increases to grow in 2027, while only 8% expect that it will go down. Last year the responses were evenly split.

Most of these raises are performance-driven, with merit increases responsible for more of the budget than all other categories combined, including promotions and cost-of-living adjustments. “We're focusing on business-critical roles, and we're allocating that pay to employees with in-demand and emerging skills,” said Thomas.

Employees are not working out of the goodness of their hearts, no matter how important the mission, and understanding pay trends is an important tool for talent acquisition. “Recruiters are increasingly becoming strategic advisers on critical talent to drive business transformation,” Thomas said. “Having an understanding of what pay is trending at, and particularly things like skills premiums, that's critical for them in their role today.”

— David

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More Recruiting Insights

U.S. Hiring Slumps, a Worrying Sign for the Economy. Last week’s U.S. jobs report was brutal, with a loss of 23,000 jobs in July and downward revisions of another 103,000 jobs in May and June. (NYT)

Metaview Acquires Reval. In what looks a lot like an acqui-hire, Founders Seth Tilliss and Aditya Gupta will be joining the Metaview team. They will join the team working on fillmore, Metaview’s “autonomous AI coworker” that the company says already has a 2,000 employer waitlist. (BusinessWire)

The Rise of the 1 am Job Interview. Disruptive technologies always bring unexpected change. Not all those changes are earth-shaking. Freed from a human interviewer, candidates are now scheduling late-night interviews with AI, because… why not? (Wired)

Company accidentally leaves hilariously tone deaf AI prompt in person’s job-rejection email. Oops. (Good)

Webinars

Employer Brand Ask Me Anything (AMA)

August 21, 2026 | 2:00 PM EDT | 1 Hour

Candidates don’t start with your careers site anymore. They start with an AI search result, a Reddit thread, a TikTok from a former employee, or a Glassdoor page nobody on your team wrote. Discover how employee voice and experience-first branding can help TA leaders earn trust in the age of AI. (ERE)

How to Hire for AI Fluency Now That It’s a Critical Skill

August 26, 2026 | 2:00 PM EDT | 1 Hour

Drawing on patterns from more than 60,000 AI-enabled technical interviews, CoderPad’s Bayo Ojuri offers a practical framework for defining, assessing, and scoring AI fluency by role. The webinar focuses on realistic exercises, fresh questions, consistent criteria, and observable signals that help hiring teams distinguish genuine capability from polished but shallow answers. (ERE)

Veteran Hiring Ask Me Anything (AMA)

September 1, 2026 | 2:00 PM EDT | 1 Hour

Most hiring organizations say they value veterans. Few understand the true meaning of the transition, or what’s on the other side of it: candidates trying to translate high-consequence experience into a résumé and an interview recruiters can recognize and quantify.

Sean and Bradley have each lived the transition and led hiring teams on the other side. Bring your questions and get answers from two people who’ve actually done both. (ERE)

What AI Is Actually Delivering in Recruiting: New Research from Kyle Lagunas

September 18, 2026 | 2:00 PM EDT | 1 Hour

Kyle Lagunas has spent the past three years studying how AI performs inside real talent acquisition teams. His research includes a survey of more than 350 senior HR and talent leaders, a head-to-head evaluation of 12 AI interviewing platforms, and an in-depth look at the rise of candidate fraud.

In this session, Kyle will share the findings that matter most to recruiting leaders. He will break down where AI is delivering measurable value, where tools are falling short, and what organizations should consider before making their next investment. (ERE)

Conferences

ERE Recruiting Innovation Summit

San Diego, CA
November 10-11, 2026

Talent acquisition is moving fast. The best leaders are not just chasing trends. They are comparing notes, testing new approaches, and learning from practitioners who are already deep in the work.

This November, the ERE Recruiting Innovation Summit comes to San Diego for two days of practical insight, honest discussion, and peer-to-peer learning. You’ll hear real examples from recruiting teams tackling today’s biggest questions, from AI and automation to candidate trust, quality of hire, hiring manager alignment, employer brand, and recruiting at scale.

Experience the future of talent acquisition next month. We hope to see you there! (ERE Recruiting Innovation Summit)