Salary Budgets Are Flat—But Jobs and Skills Are Changing Fast

US salary increase budgets are projected to remain at 3.5% in 2027, unchanged from 2026. But stability in the headline number does not mean the workforce—or the way companies allocate compensation—is standing still. In this episode of C-Suite Perspectives, Steve Odland, President and CEO of The Conference Board, speaks with Diana Scott, US Human Capital Center Leader at The Conference Board, about findings from the 41st annual US Salary Increase Budgets 2026–2027 study and what they mean for business and human capital leaders. Together, they discuss why the average merit budget of 3.1% should reward performance rather than compensate for inflation; how companies can target limited pay dollars toward promotions, critical skills, retention, and equity; and why AI capabilities should be rewarded only when they create measurable business value. They also explore how automation is changing the mix of work even when overall headcount remains stable, the expanding role of CHROs in workforce transformation, and why transparency and a broader total rewards story are essential to maintaining employee trust. More from The Conference Board: ·       US Salary Increase Budgets 2026–2027 ·       The Evolving Role of the CHRO in the Boardroom ·       A Framework for Agentic AI and Work Redesign ·       Skilling for AI: Critical Factors for Navigating AI Disruption