The results are in and, on average, employers paid out merit and total increases just slightly below what they projected back in October 2025. The mean merit increase paid to employees by the 756 employers who participated in the March 2026 survey was 3.1% , versus 3.2% in October. Average total increases, including zeros, which includes all types of increases in addition to merit, were 3.4%, versus 3.5% predicted in October.

Differences by industry

Across the board, there was not much variety in terms of merit increase percentages actually delivered. Organizations in Other Manufacturing and Services (Non-Financial) industries delivered smaller average merit increases, while several delivered average merit increases above the national average, but not by much. None of the industries reported average merit increases above 3.2%. Back in October, some industries were a bit more optimistic: High Tech organizations projected average merit increases of 3.4% while actually delivering 3.2% average merit increases in 2026.

The story is a bit more varied when it comes to total pay increases in 2026. High Tech had the highest average total increase percentage, at 3.6%. Several other industries hovered right around the national average in total increases. In contrast, several industries had the lowest average total increases:

• Transportation Equipment and Retail & Wholesale, both with average total increases of 3.1%
• Chemicals and Other Manufacturing, both with average total increases of 2.9%

Unlike prior years, Health Care Services organizations are not at the bottom when it comes to average merit or total increases this year. They provided on average (including zeros) a 3.0% increase in merit pay and 3.3% increase in total pay.

‘Peanut butter’ approach to increases

You may have seen some splashy headlines that claimed that an increasing number of employers are providing across-the-board increases rather than merit increases. Sometimes this strategy is called the peanut butter approach, because the company takes the budget and spreads it evenly across employees, regardless of performance or merit.

Only 4% of the US Compensation Planning Survey participants said they gave equal, across-the-board salary increases. The majority still use some combination of individual performance, position relative to market value (in one way or another), or position relative to peers.

Adjusting salary structures

The majority of respondents use a formal salary structure where each job is assigned to a pay grade based on market data. Fifty-six percent of them also use geographic differentials.

Just under 60% plan on adjusting their salary structure in 2026 on average by 2.6%, excluding those that responded with zeros. This aligns with the typical pattern we see of companies adjusting salary structures annually or biennially and the adjustment being lower than the average merit increase percentage.

We’d like to hear from you

Did you participate in this version of the Mercer QuickPulse® survey? If not, we’d love to hear from you in our next survey. Each year we offer three chances to participate in compensation planning surveys and then an additional three or four surveys on hot topics, incorporating issues that HR pros are dealing with today. By participating you will receive the full results of the survey at no cost to you. Sign up to be notified when the next survey opens.

Here to help

Mercer’s team is here to help you find the right salary surveys, assess your total rewards programs and practices, and serve as an extra team member on a variety of projects. Give us a call at 866-605-1031 or email surveys@mercer.com.

About the author

Rebecca Hall, Principal

Rebecca spent much of her career working in compensation in various corporate roles then transitioning to consulting with Mercer. Her current role, as the Content Leader for imercer.com, allows her to leverage her knowledge of human resources and talent strategy to create materials supporting Mercer’s Products & Services in North America.

All averages/means include zeros except if noted otherwise.