Employers are prioritizing AI skills. What’s it mean for pay raises? (Courtesy of the Jacksonville Business Journal) — Workers are being asked to upgrade their artificial-intelligence skills, but most of the time that does not come with a pay raise.
The latest Compensation Best Practices Report by salary data company Payscale found that 55% of companies surveyed said they are not offering any pay premiums or bonuses to employees who have upped their AI skills.
The survey, which gathered more than 3,400 responses from managers, directors, executives and other company representatives, found that just 14% offer higher base pay, 10% offer bonuses and about 9% offer long-term incentives for building AI skills.
Part of the reluctance to offer higher pay to workers who upskill can be traced to a job market that has seen lower turnover as workers stick with current roles. Companies said turnover dropped to 8%, one of the lowest rates recorded by Payscale. Less than half of companies said they made hires last year.
Meanwhile, 51% of companies said the biggest challenge their organization faces is balancing employee pay expectations with budget restraints.
“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,” said Ruth Thomas, chief compensation strategist at Payscale, in a statement.
But companies are already adding AI-related skills to job requirements, with 31% saying they have done so for IT-related jobs and 20% saying they have done so for at least some non-IT jobs. About 33% said they have not changed any role expectations due to AI.
Overall, 43% of companies have not changed the way they address compensation, and some companies have pulled back considerably, with 16% saying they have reduced pay increases.
The majority of companies that responded to the survey are not replacing workers with AI and have no plans to do so in the future. However, roughly 13% are moving forward with plans to replace roles with AI, while 17% are considering it, according to the report.
When ranked by industry, construction had the highest share of companies saying they were working to replace workers with AI tools, at 27%. About 19% of business services companies and 17% of technology companies said they were actively replacing workers with AI.
But it’s not just AI. Companies across the country are tweaking their approach to pay raises in 2026 as the labor market evolves.
A survey by WTW indicated that companies are going to be growing their salary budgets at 3.4% in 2026 compared to last year, the same amount salary budgets grew in 2025.
The WTW survey noted that employers were largely set on flat increases as 2026 began, with 62% of employers surveyed saying they had not changed their budgets since they were set midway through 2025. Just 6% of employers had increased their budgets, while 21% had decreased their budgets.
For those companies that did change their initial salary budgets, the top reasons given for the change were to control costs and to hedge against potential inflation. That means the traditional approach of all employees getting a flat increase, or spreading the dollars around broadly to all employees, is being replaced by a more-strategic approach.
The assessment of the job market comes as unemployment has ticked up over the last few years, rising from a low of 3.4% in 2023 to 4.6% in November. Meanwhile, the job market itself has become increasingly bifurcated, with some industries and skills — such as AI experience or health care — in high demand, while other sectors have seen job losses.
Many workers are holding steady in their jobs out of fear of losing their jobs, even if layoffs are relatively low. A survey of 1,000 workers by MyPerfectResume for a portion of its 2026 State of the Workforce Report titled The Great Stay found that 32% of workers fear losing their jobs in 2026 — and 49% believe the labor market will get worse, up from 34% who believed the same thing last year.
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