More than half of organisations surveyed (60%) expect economic conditions to have at least a moderate impact on compensation decisions in 2027.
But most are still in the early stages of finalising those plans: as of July 2026, 89% of participating organisations were still gathering data for 2027 salary budgets, while just 6% had proposed budgets to leadership and 5% had already received approval.
Elizabeth English, Senior Talent and Careers Leader at Mercer Canada, said the pattern is consistent with how employers have navigated recent uncertainty.
“Most organisations are still early in the annual planning cycle, and while the current news cycle points to continuing instability, past data shows these projections are likely to be accurate,” she said. “Right now, economic uncertainty plays a huge role in employers’ compensation strategies, so organisations are planning to make the most of their spending by using data to ensure their spend goes to areas of labour need and where talent risk is high.”
Promotions and off-cycle pay enter the compensation mix
The survey points to a broadening of the tools employers are using to manage pay, beyond the traditional annual merit review.