Top trends in total rewards

For front-line workers around the world, the most pressing issues are flexibility, financial wellness and having a say when it comes to their work-life balance, according to a recently released 10-country survey of more than 8,000 workers from workforce management platform UKG.

More than three-quarters of front-line employees surveyed reported burnout in 2025, and 56% said they were living paycheck to paycheck, although that number is down from 64% in 2024, per the report.

Nearly half (47%) said there were two separate cultures at their workplaces: one for front-line employees and one for everyone else. In addition, 28% of all front-line workers said “there are not enough opportunities to move up in their current organization.”

Front-line workers — meaning employees who need to do their jobs in person, as well as workers who build products and serve customers, patients, students and residents — comprise almost 80% of the global workforce, according to the UKG, which cited Statista and research firm Gartner.

In the U.S., front-line workers make up 70% of the workforce, according to a 2025 study by HR advisory firm The Josh Bersin Co. in collaboration with UKG. That same study found that these workers are increasingly difficult to find, train and retain.

After salary, scheduling flexibility was the most important factor when it came to whether front-line employees stayed at their jobs or left.

Half of employees surveyed said it was challenging to make last-minute shift changes when personal issues come up, and 57% said they weren’t able to take enough time off. In the hospitality industry, 58% of front-line workers said their schedules made it “impossible to maintain a healthy lifestyle,” per the report.

A lack of upskilling was also cited in the recent UKG study, with 20% of front-line employees saying that there aren’t enough opportunities to learn new skills. However, 36% of manufacturing front-line employees reported learning new skills, including how to use artificial intelligence, to prove their worth.

“Frontline workers are shaping the customer experience, delivering the goods we want, and providing the services we need that make the world’s economy run,” Rachel Barger, president of Go-to-Market at UKG, said in the report, adding that understanding their underlying pain points was crucial. “This understanding supports leaders to improve employee engagement and retention by knowing where to step in to provide support.’

Only a quarter of organizations explain the purpose and design of their reward programs clearly, which could affect employee trust and engagement, according to a recent report from Korn Ferry.

While 24% of employers provide details about the “what, why and how” of their reward program strategy, 76% said they don’t communicate about it all or only share high-level philosophy statements.

“With pay transparency regulations accelerating globally, organizations must be prepared to articulate the why behind their reward structures, career frameworks and pay decisions — something only a quarter of companies do well today,” according to the report.

In a survey of nearly 8,000 companies, 65% said they see pay transparency as a key driver of change in the next one to two years.

Few employers feel prepared for pay transparency laws, with many still “getting ready,” according to an Aon report. Most companies remain focused on compliance rather than using pay transparency as a strategic priority, the report found.

In addition, skills-based and performance-based pay models are expected to gain traction during the next 3-5 years, according to the Korn Ferry report. 

Employee engagement is also important, the report found. Although employees are typically considered to be the most important stakeholder of rewards programs, only half of companies incorporate employee input when shaping reward strategy. Among those who do, the most common methods include engagement surveys and informal input from managers.

Although artificial intelligence tools offer potential for transparency and pay equity, the report found, HR readiness still seems limited and employees remain cautious.

“These findings present a wake-up call for organizations and HR leaders relative to fit-for-purpose reward strategies,” according to the report. “Today’s reported common practices in reward strategy are not necessarily best practice for tomorrow’s challenges.”

Most U.S. employers expect to maintain steady pay plans in 2026, pointing to a disconnect with organizational priorities such as talent development and market competitiveness, according to a Mercer survey. Most respondents plan to spread increases equally rather than direct more funds to high-demand skills.

While nearly half of companies (48%) expect to award performance-based pay increases, a growing share are considering a different approach: the “peanut butter” pay raise, according to a preview of Payscale’s 2026 Compensation Best Practices Report. 

The peanut butter raise approach provides workers with across-the-board salary increases, Payscale explains, and is gaining consideration from employers with large front-line or lower-wage populations. 

Already, 9% of companies take this approach and 16% are ready to implement it, Payscale said. Another 18% said they are considering doing so.

Peanut butter raises, although less traditional, may have sticking power, as companies reassess their compensation strategies in the face of inflation, Payscale said. 

“While merit pay is still a best practice, performance ratings-based salary increases have faced criticism in recent years for being subjective, bias-prone, and administratively complex, especially in a volatile labor economy that faces economic uncertainty,” the report found. 

Similarly, a December 2025 Mercer report found that most of the companies it surveyed planned to spread salary increases equally across all workers rather than spending more on employees with high-demand skills or to address market gaps.

Mercer noted that this approach might represent a “disconnect” with companies’ priorities of talent development and market competitiveness. 

“By focusing compensation budgets on high-demand skills rather than spreading resources too thin, leaders can more effectively drive their workforce strategy and secure the talent essential for success,” Mercer’s U.S. workforce solutions leader said at the time.

One in 10 companies said they are not confident about how competitive their pay increases are in attracting and retaining talent, and 5% said they are not at all confident, the Payscale report found. A quarter of companies said they felt neutral about their competitiveness. 

Overall, median base-pay increases are expected to hold steady in 2026. Companies awarded 3.5% raises last year and plan to do the same this year, Payscale said.

Nearly three-quarters of U.S. companies plan to expand their leave programs in the next two years, according to research from by WTW, a global advisory, broking and solutions company.

These investments are driven by a focus on improving employee experience (67%) and upping attraction and retention (60%), WTW found. 

The investments are in multiple forms of leave, including parental, bereavement and caregiver leave, the report found.

“Leave programs have become a strategic differentiator for employers competing for talent,” Alex Henry, group benefits leader at WTW, said in a statement. “Enhancing leave programs can be a cost-effective way to improve well-being, strengthen culture and meet the evolving expectations of a modern workforce.”

Of the 585 employers surveyed, more than 4 in 5 provide parental leave, and 16% plan to enhance those programs, WTW said, while 18% of employers expect to either increase the duration or broaden the eligibility requirements of their bereavement leave. Caregiver leave is predicted to nearly double over the next two years, growing from 22% to 39%, the report found. 

Investment in unlimited paid time off also is climbing; 15% of companies provide the benefit to exempt employees now, an increase from 12% two years ago, and 18% plan to in the next two years, WTW said. 

Paid time off policies reduce turnover for all workers, regardless of how much job satisfaction they have or whether they have flexible schedules, according to a joint Florida Atlantic University and Cleveland State University study published in March 2025. 

Employers identify program administration as their greatest challenge (49%) in implementing these changes, however, followed by integration of leave systems (39%) and coordinating workforce availability as leave use rises (38%).

Equity grants — a compensation option that gives employees company stock — are increasing in popularity around the globe, according to a recently publised report.

That means HR professionals should think beyond pay and design compensation strategies that integrate short-term cash rewards with long-term equity incentives, according to Deel and Carta research.

“Positioning equity as a central component — not a supplementary perk — can help attract top talent, align employee interests with company growth, and improve retention without overextending fixed payroll costs,” according to the firms.

Such efforts are particularly important for employers aiming to be competitive in certain industries or in a global market, they said. 

For example, equity is increasingly valued as part of total compensation in emerging markets like Brazil and India, according to the report. There’s also a shift toward equity-heavy compensation for technical talent, it showed — something that could be relevant for employers seeking specialized AI talent.

While the compensation option may be well associated with executives and tech startups, it’s increasingly being offered elsewhere — like to Walmart store managers, for example. The employer last year announced plans to add $20,000 in stock grants to the annual compensation packages of Supercenter store managers in the U.S. The company said managers of other types of Walmart stores would be eligible for $10,000 and $15,000 stock grants.

Companies on the fence about offering an employee benefits plan that covers GLP-1s may find the following data helpful: A report from risk consultation firm Aon suggests workers’ sustained GLP-1 use can reduce employers’ costs over time.

Analysts looked at data for more than 50 million people, including 192,000 GLP-1 users, for a little over two years. By the 30-month mark, the medical cost growth was 6% lower for people with diabetes using GLP-1s compared to people with diabetes who didn’t use GLP-1s, researchers found. 

Another key factor was consistency: The growth of medical cost was 9% lower for people with an 80% adherence to the medication. 

Results were similar for people using GLP-1s for weight loss.

Additionally, Aon researchers observed that women who used GLP-1s experienced about a 50% lower incidence of ovarian cancer and about a 14% lower incidence of breast cancer compared to nonusers over the analysis period. 

And whether an individual used GLP-1s for diabetes and weight management, they tended to need fewer hospitalizations for “major adverse cardiovascular events,” such as strokes. Outcomes were especially positive for women, though men also saw reductions in these events.  

What GLP-1 findings mean for HR

Despite the drug’s popularity and workers clamoring for coverage, only 23% of employers cover GLP-1s, according to a SHRM benefits survey released last June.

By contrast, Aon’s research illuminates how GLP‑1s can become a part of an organization’s talent strategy, Aon's Head of Health for North America, Farheen Dam, suggested in a statement. 

“The real impact comes when employers consider not just coverage, but also how these medications are used, supported and sustained over time,” Dam said. “By pairing thoughtful GLP-1 strategies with programs that encourage adherence and total well-being, organizations can improve outcomes for their workforce.”

As the financial burden of healthcare continues to rise for employers and employees alike, however, a cost-benefit analysis is crucial for business leaders.

The rising cost of healthcare in 2026

By Aon’s projection, healthcare costs for U.S. employers will increase by 9.5% in 2026. Researchers noted that prescription drugs make up about a third of total healthcare costs and are driving up overall healthcare costs each year — with GLP-1s increasingly to blame.

Similarly, a 2026 benefits cost outlook from HUB International reported that GLP-1s, regardless of their purpose, made a “significant impact” on the benefits landscape as a high-cost prescription drug.

Still, cancer, obesity and the latter’s co-morbid conditions can also drive up total healthcare costs, researchers noted.

“Conditions like obesity, diabetes and cancer are among the most pressing health challenges facing employees, their families and the organizations that support them,” Aon’s chief administrative officer, Lisa Stevens, said in a statement. 

The positive outcomes confirmed by Aon’s data offer “real hope for advancing population health and helping millions of people lead healthier, fuller lives,” she added.

As the private sector continues to shift from defined benefit retirement plans to defined contribution ones, overall participation in employer-sponsored retirement plans continues to hover around the 50% mark, according to a report from the National Institute on Retirement Security.

An analysis of the U.S. Census Bureau’s Survey of Income and Program Participation data showed that 51% of workers had a DC plan through their main employer. Of workers with a positive DC plan balance, 80% had a DC plan through their main employer, NIRS said. 

“If workers are saving for retirement in a DC plan, it is almost certainly because they have a plan at their job,” NIRS said. “This suggests that working Americans have struggled to save adequately for retirement largely because they are not offered any retirement savings plan at work.”

Among workers with positive DC plans, median balances were $40,000 in December 2022, the report found. However, when looking at all workers, including those without any retirement savings, the median amount saved was only $955.

“The bottom line is that if Americans are not saving for retirement through their employer, then they are probably not saving at all,” NIRS said. 

NIRS Executive Director Dan Doonan said that as Americans face “a growing affordability crisis,” retirement needs to be a part of the conversation.

“Most retirement programs today rely on workers saving voluntarily, with the tension between saving and the cost of buying a home, daycare, and college creating enormous challenges for the middle class,” Doonan said in a news release. “This research shows the fragility of both the nation’s retirement infrastructure and retirement preparedness for the typical U.S. household.”

Doonan highlighted data on the retirement savings of those ages 55-64; among that age group, the median saved for retirement is $30,000. 

“Even among those with savings, balances often are far too low to support a secure retirement,” Doonan said. “Strengthening access to reliable retirement plans is essential if we want Americans to retire with dignity rather than anxiety.”

The amount workers have saved is in stark contrast to how much they expect to need in retirement. Just shy of 50% of U.S. workers said they’ll need at least $1 million in savings to retire comfortably, according to a December 2025 report from Betterment at Work, a provider of 401(k) plans. 

Part of the problem may be that employers are unaware of their workers’ reality. While more than three-quarters of employers think their employees are prepared for retirement, less than half of workers think so, per an August 2025 PNC Bank report.