Salary budgets remain steady at 3.6% for 2027 as employers reward top talent

SYDNEY, 30 Sep. 2026 - Aon plc (NYSE: AON), a leading global professional services firm, projects organisations in Australia will budget for median salary increases of 3.6% in 2027, up slightly from median actual salary increases of 3.5% in 2026, according to the firm's 2026 Salary Increase and Turnover Study.

The key workforce story for 2027 is not the size of salary budgets, but how organisations are allocating them. While pay growth remains steady, the findings indicate a selective approach to salary planning, with employers shifting from broad-based increases towards targeted investment in critical roles, scarce skills and priority workforce segments.

“Salary budgets remain relatively stable, but employers are becoming more deliberate about where they invest reward dollars,” said Yvette O'Reilly, Associate Partner, Talent Data Solutions Business Leader, Pacific, Aon. “The organisations achieving the greatest impact are not necessarily those spending more, but those making more informed decisions about where reward investment is directed. We are seeing employers become increasingly targeted in how they allocate salary increases, prioritising critical roles, scarce skills and talent segments that are most important to future business performance.”

Industry Highlights

Projected median salary increases remain consistent across industries, ranging from 3.5% to 4%. Technology and retail, e-commerce, wholesale and hospitality organisations are expected to record the highest median increases at 4%. Most industries are clustered around the national median projection of 3.6%, indicating similar budget expectations across sectors.

Similar budgets do not necessarily translate into similar employee outcomes. Organisations are increasingly directing reward investment towards critical roles, needed skills, high-performing talent and areas where retention risk poses a significant business challenge.

Median voluntary turnover continues to vary widely across industries. Financial services recorded the highest median voluntary turnover rate among organisations surveyed at 15.6%, followed by consulting, business and community services at 14.4%. By comparison, energy reported a median voluntary turnover rate of 8.7%.

The findings also highlight the growing connection between salary planning and workforce movement. Employers are increasingly using turnover data, talent availability and future capability needs to inform reward decisions.

“Workforce decisions have never been more complex, making access to reliable and defensible data essential for organisations,” said Belinda Armenta, Head of Talent Data Solutions, Asia Pacific, Aon. “As AI, economic uncertainty and changing workforce expectations continue to reshape the employment landscape, organisations need more than historical benchmarks. The ability to understand compensation trends, workforce movement and emerging talent risks is helping leaders make more confident decisions about attracting, retaining and developing the workforce they need for the future.”

Aon conducted its 2026 Salary Increase and Turnover Study for Australia from July to September 2026, analysing salary increase budgets and employee turnover rates from 500 organisations across Australia. Figures cited in this release are median results unless otherwise stated. Sample sizes vary by measure.

Learn more about Talent Data Analytics at Aon in Australia here.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses.

Follow Aon on LinkedIn, X, Facebook and Instagram. Stay up-to-date by visiting the Aon's newsroom and sign up for news alerts here.