When it comes to compensation, the top challenge facing organizations is how to balance "pay expectations with financial limits," according to Payscale's 2026 Compensation Best Practices Report.
Balancing pay expectations is a "top challenge" for employers:
51% of surveyed organizations said "balancing pay expectations with financial limits" is their “top challenge.”
Misinformation is driving workers perceptions around pay:
40% of organizations reported that “misinformation/disinformation from unverified salary sources is driving unfair pay perceptions.”
Pay transparency is the answer to misinformation around compensation:
Employers are "leaning into pay transparency efforts" as a way to "counter misinformation."
49% of surveyed organizations are "targeting organizational-wide or public pay transparency in 2026," up from just a third of organizations that said the same last year.
AI proficiency is becoming an expectation without added compensation."
AI-related skills are increasingly critical, but don't necessarily translate to higher pay:
61% of employers said they have "updated existing roles to include AI-related skills or competencies."
However, 55% of organizations said they are "not adjusting compensation for those skills."
30% of surveyed organizations said they “are already replacing roles with AI or seriously considering it.”
"Peanut butter pay" raises are becoming more common:
44% of surveyed organizations said they are considering "peanut butter" pay increases this year.
What is a "peanut butter" pay increase? Good question! It's a term to describe "across-the board raises that are even and spread thinly, like peanut butter would be on a sandwich."
48% of organizations said they “will continue giving out pay increases based on performance.”
Compensation is being elevated to an executive-level business priority:
Payscale predicts that 2026 will be the year when "compensation is elevated to an executive-level business priority rooted in measurable outcomes."
As corporate budgets shrink, compensation is “becoming an increasingly important strategic lever.”
Compensation in 2026 is being reshaped by shrinking budgets, a cooling labor market, and the accelerating influence of AI, creating sharper divergences in how organizations approach pay."
Read more via Payscale
Desperate times call for desperate measures.
A record percentage of American workers are "digging into their retirement savings because of financial emergencies," according to Vanguard Group.
In 2025, a record 6% of workers took so-called "hardship withdrawals" from their 401(k) plans, up from just 4.8% in 2024 and well above the "pre-pandemic average of about 2%."
Vanguard says the data suggests a "divergent financial picture of American workers’ finances."
While some Americans are "faring well," others are "experiencing heightened financial stress."
The primary reasons cited by those taking hardship withdrawals were "avoiding foreclosure and eviction, and paying medical expenses."
Read more via The Wall Street Journal
A significant percentage of hiring managers say they would be less likely to choose an overweight candidate, according to a new survey by weight loss program provider Sunlight:
Highlights from the survey of 1,000 U.S. hiring managers:
A significant share of hiring managers admit bias against overweight candidates:
Almost 20% of respondents said they "would discriminate against an overweight candidate."
28% of hiring managers said a candidate's weight "plays into their first impressions."
14% of hiring managers said they would give overweight job seekers "worse" job offers.
The survey found that "mid-career" hiring managers and male hiring managers are the most likely to be biased against overweight candidates.
34% of male hiring managers said they would be biased against an overweight candidate. That's compared to just 18% of female hiring managers who said the same.
Overweight employees could see lower raises and fewer opportunities to move up in an organization:
17% of hiring managers said they would give "smaller raises" to overweight employees.
Almost a quarter of hiring managers said “overweight staff are less likely to rise into executive or leadership roles in time.”
Why are managers biased against overweight workers and job seekers?
30% of hiring managers said overweight workers “lack self-discipline."
33% of hiring managers believe overweight workers "lack stamina."
Over 30% of hiring managers say “clients will take overweight staff less seriously.”
Read more via Inc.
Job security is low. The threat of AI displacing workers feels increasingly real. And, perhaps as a result, American workers are increasingly in "founder mode," according to The Wall Street Journal.
In January 2026, there were "532,319 new-business applications" filed across the country, "36.8% more than a year earlier."
There was also a significant rise (up 69%) in the number of LinkedIn users who identify as "founders."
The recent increase in business-formation applications has “nearly matched the pandemic peak of 546,719 in July 2020.”
The threats and opportunities presented by artificial intelligence are driving people to bet on themselves."
Why are Americans looking toward entrepreneurship?
It could be that starting a business is the last option following a "fruitless job search."
Some workers might be looking to become self-reliant and escape an industry where AI is threatening jobs.
Or AI could be playing a positive role in helping "those who dream of being their own bosses to get startups off the ground."
Many new founders may have long avoided following a passion due to how risky it seemed to go out on their own. Given how little job security there is at the moment, founding a business may not seem so risky after all.
We’re in a moment when a lot of people figure it might be even riskier to depend solely on a paycheck from someone else."
