Salary Budget Planning Report
ZURICH, GENEVA, LAUSANNE, January 27, 2026 – In 2026, employers are sharpening their focus on compensation strategy. Successful workforce management will not depend on the size of the budget, but on how deliberately it is deployed. As AI initiatives have yet to generate tangible cost savings, compensation must continue to reflect real workforce needs.
Swiss salary budgets for 2026 remain stable at 2.5%, matching the actual increases implemented in 2025. Inflation expectations have regulated across many economies, reducing the need for reactive pay adjustments and enabling organizations to plan compensation strategies more proactively. This is according to WTW’s latest Salary Budget Planning Survey (NASDAQ: WTW).
Budgets are expected to remain stable in 2026 due to greater clarity, more disciplined prioritization and understanding of where compensation can drive meaningful impact.
For the current cycle, 47.7% of employers have made no changes to projected pay budgets since they were first set mid-way through the year. While 7.8% are increasing budgets, 30.5% of employers will decrease pay budgets. For those making changes to their initial budget projections, key influencing factors include expectations of recession or weaker financial performance (37.9%), cost management concerns (32.8%), anticipated stronger financial results (20.7%), inflationary pressure (17.2%) and concerns over a tight labor market (13.8%).
“Employers are entering 2026 with clearer pay priorities and stronger discipline, using salary budget not simply as financial inputs but as strategic levers. Yet beneath the stable medians lie meaningful shifts in how organizations allocate pay, manage complexity, and plan for a workforce that continues to evolve faster than traditional budgeting cycles,” said Anna Ylikorkala, Senior Consultant, WTW Switzerland. “In the year ahead, success will not depend on how much budget organizations have, but on how effectively they direct it. Stability may be the story at year-end, but strategy will define what comes next.”
“In the year ahead, success will not depend on how much budget organizations have, but on how effectively they direct it. Stability may be the story at year-end, but strategy will define what comes next.”
Anna Ylikorkala | Senior Consultant, Switzerland
| Year | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 planned |
|---|---|---|---|---|---|---|
| Increase | 2.0% | 2.3% | 2.6% | 2.5% | 2.5% | 2.5% |
The recent consistency in salary budgets reflects underlying changes in how leaders are approaching workforce planning and compensation decision-making, with many organizations reporting stronger governance around pay decisions, more sophisticated use of market data and segmentation and increased focus on affordability and maintaining internal equity. As such, only 27% of organizations in Switzerland have reported issues with attracting or retaining employees.
Staff voluntary turnover rates have continued to decline over the past year, moving from 7.2% to 6.8%, with companies directing limited budget capacity toward retaining critical talent and addressing pay compression where it is most acute. Other staff retention actions have included improving the employee experience (50%), a stronger focus on diversity, equity and inclusion (49%), increasing use of training opportunities (48%), greater workplace flexibility (38%), and making changes to health and wellness benefits (33%).
Anna Ylikorkala added: “As pay budgets stabilize, we’re seeing just how important it is to focus on honing the employee experience. While we’ve seen a surge of investment in AI and automation pilots in the last two years, as organizations test new ways to improve productivity and operational efficiency, this hasn’t yet translated into actionable labor-cost savings. So, it’s key that organizations proactively plan how to make the best use of their budgets for employee satisfaction and productivity.”
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
In Switzerland WTW is based with offices in Zurich, Geneva and Lausanne.
