The State of HR Compensation in 2026

Mo: [00:00:00] Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization, People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. Each week we bring you in-depth conversations with the country's top HR executives.

And thought leaders For today's conversation, I'm excited to be joined by Dawn Fay, operational president at Robert Half. We're going to discuss how HR Pay is shifting in 2026, what these pay trends mean for HR executives and how to stay competitive in today's evolving market. Welcome, Dawn.

Dawn Fay: Thank you so much for having me.

Mo: Great to have you with us, Dawn. So Dawn, when it comes to employment, let's start at the big picture level. HR executives ended 2025 with relatively cautious attitudes and expectations for Q1 of 2026. Now we're seeing a [00:01:00] mild revival and executives feelings about current employment conditions, but expectations around wage and salary growth have softened.

What are you currently seeing in terms of compensation trends across HR roles, and how does 2026 compare to the hiring market? We saw a year or two ago.

Dawn Fay: Well for the job market in 2026, what we've seen so far is that things have normalized coming out of the pandemic. As you know, the market was really, really RA raging there, and the opportunity for talent was just.

Amazing, and we really saw wages rising very heavily Then as things have kind of normalized, now, what we're seeing in the Robert Half Salary Guide we put together for 2026 is we're projecting a 1.6% increase for wages in HR. Now that compares to a 3.2% increase. That was in 2025 and a 4% increase the year prior to that in 24.

So [00:02:00] moderating a bit

Mo: and Robert HAFs 2026. Salary research shows that compensation for many HR roles is still trending upward, but at a more measured pace. What's driving that moderation, and where are you still seeing meaningful upward pressure on pay?

Dawn Fay: So it's really moderated for a couple reasons. As organizations have stabilized and normalized their headcount, you've got a lot that's been going on in the geopolitical world that's out there and in the economy.

So as things have kind of taken a little bit more of a measured approach, we have seen those salaries. Kind of fall in line and, and, and normalize a bit as well. That said, there is still upward wage pressure on, uh, roles that have really high in demand skills, and a lot of those, as you might imagine, are really tied into the tech space.

So those HRIS roles, uh, roles that also are, uh, tied to comp and benefits because as you might imagine with all of the. Nuances going [00:03:00] on and workforce planning that's out there right now, and making sure that companies are hiring the right people, the right place, the right time. All of those physicians tied to helping organizations do that as well as the own HRIS, uh, roles is where we're seeing increases.

And those increases could be anywhere from 3.2 to 3.4%. So more than double that 1.6% average we're seeing overall for human resources.

Mo: So from your vantage point at Robert Half, how competitive has the market become for experienced HR talent right now?

Dawn Fay: Well, right now, uh, when we talk to, uh, human Resources managers, the 59% of them say it has been difficult for them to hire talent.

There is definitely demand for these skills in the marketplace, and as you ever have a shifting marketplace, it becomes more difficult. There are skills, gaps that are out there, and new, new skills that you have, and maybe the folks that you have don't have 'em yet, or things that you need. Maybe [00:04:00] people don't have that much experience yet in the marketplace.

It's becoming a complex hiring marketplace for many roles, and human resources is no different than that. There's a real shift that's been going on, so there's demand and it is hard to find good talent

Mo: and. Your research suggests that many HR leaders are willing to offer higher salaries for candidates with these specialized skills, particularly, uh, like HR technology, as you mentioned, analytics.

How big of a premium are employers actually paying for those capabilities right now?

Dawn Fay: Yeah, that's right. There are, uh, definitely a premium that people are willing to pay. I mean, individuals know that you need to pay more, but it's also beyond the compensation and the base pay, we're seeing organizations get creative with individuals.

Flexibility is certainly, uh, something that is top of mind for individuals. So it's really combining the pay along with flexibility, along with [00:05:00] learning and development for individuals. And growth potential that's out there. So it's really that total compensation package that's attracting top talent. And if you wanna hire people in these in demand areas, not only do you need to pay a bit of a premium, uh, for those skills, you're going to need to also look at total package.

And what else are you offering these individuals to attract them and retain them for your organization.

Mo: And when you say flexibility, are you referring to flexibility in schedule? Are you referring to a combination of work from home and, and go to office? Uh, what exactly do you mean?

Dawn Fay: Yes, flexibility. Uh, it's a good question because it, it is really a lot of different things to a lot of different people.

So it's important that you ask. Flexibility for some folks means. The hours of which you come into the office, but you might need to be in the office every day. Flexibility could be which days that you come into the office. One size doesn't fit all. And it also is, is about the seasonality [00:06:00] too of companies and workflow.

So I think it's important for people to realize that one size doesn't fit all for individuals and for any business. And if, if it's. This today. It could be that tomorrow based on how the workflow is ebbing and flowing, and how an individual's personal life might be also playing into, uh, you know, factors as to when they could be in the office more or, or would want to be in the office more.

So that flexibility can mean a lot of different things.

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Mo: And back to what you said about the demand for HRIS rules, uh, compensation and benefits rules.

What is driving that demand and how significant are those pay increases?

Dawn Fay: We're seeing the, the salary growth for those areas to be about double what the, the increase is overall. So that's significant. And what's [00:07:00] driving that is really the changes in the work environment when you see the impact that technology is having, um, across the board that is not, not.

Any different in human resources. So those HRIS roles, they're really looking for people that have that tech savvy. And if you do, that is a premium skillset to have if you've got exposure and knowledge to ai, which obviously is very important in the workforce today as people are trying to figure out how to get greater efficiencies from, uh, in, from.

From all the tech tools that are out there, there is a, a premium that people are paying for those sought after skillset. So that is real in the marketplace today. And you know, there's a lot that's going on overall from comp and benefits planning and strategizing that organizations are doing as they're attracting talent across their enterprise.

Right. And other skills as well. So for individuals and human resources that can really help. Companies [00:08:00] plan and strategize and use the tools to gain efficiencies while also trying to figure out that workforce planning. Who do you need? When do you need 'em? Where do you need 'em, and what do you have to pay them?

Tho those skills are, like I said, really highly sought after in today's marketplace.

Mo: Speaking of ai, I'm curious, just Robert half itself, how much is AI playing a role in the work of Robert? Half.

Dawn Fay: You know, AI is out there and it is still early days for many people, but we certainly are using the tools, uh, ourselves, which is, um, you know, nice to be able to, to certainly help from a job writing description and, and resumes and things such as that.

We also have our own internal systems that help us identify and vet candidates, but it's just. One piece of the puzzle. Uh, and I think it's important for people to realize that you certainly, as it relates to, uh, hiring and vetting candidates, you still need to make sure that you're talking to people, um, and that you're going through thorough interviews with individuals to vet talent.

We have seen in [00:09:00] the, in the, the workplace today that. AI is actually slowing down hiring, which might be counterintuitive to what people think, but because there's been so many applications that have come through, because it's easier now for people to apply that influx, uh, that, that organizations are getting when they do post a job.

Many of those. Candidates might look the same as they've used, uh, tools to, to obviously help their resumes along too. So organizations are just saying that it's really taking more and more time now, and it's really been even just another added workflow into the human resources field, right. As those individuals tend to be heavily involved with organizations hiring

Mo: and, and are you seeing AI actually replace jobs at Robert Haaf?

Dawn Fay: You know, we have not seen AI replacing roles yet, and obviously we've all seen lots, uh, that has been written out about that. Again, I still think it's, it's pretty early on. Um, what we've seen is that AI is certainly [00:10:00] enhancing roles and I think as we've seen before. Four, whenever there's been new advancements out there with technology, um, we, we see sometimes larger organizations that have maybe more systems to begin with and, and, you know, just more capital, they may get there a little earlier than some of the smaller to medium sized businesses.

Uh, and we're certainly seeing that now with ai. Uh, but I would just say that at, at this stage, it has actually been augmenting roles more than it actually has been replacing roles.

Mo: So what does your data show about how difficult it is to hire HR professionals today compared with a year ago? And what do you think, uh, some of the barriers might be?

Dawn Fay: Well, I say that 59% say it is more difficult today to find HR professionals than it was a year ago. And again, I think it's because of those shifting roles we've been talking about. Right? Whenever things are shifting a bit you, you can have some of those skills gaps and it's harder to. Find, uh, individuals.

There's also low unemployment, and I think when unemployment has [00:11:00] been low in, uh, in certain areas like it has for human resources professionals, I think that again, you've gotta, you've gotta look a little bit harder to find the talent. And you also have, uh, you, you gotta find the right people that your organization needs.

Today, and if you're in an organization that's got a lot of change going on and a lot of that workforce planning and changing that's out there, it's really about finding the right individual for your organization today, and it's a blend of those tech skills with those core human resources skills, with those interpersonal skills.

It's really combining all of that, which just makes it harder to find an individual because it's, it's a little bit of everything that you need right now.

Mo: Is there enough training out there? It sounds like we need a new breed of HR professional. Is there enough training out there to make those people abundantly available?

Dawn Fay: Well, I think you bring up a really good question, and when it comes to learning and development, I think it's important [00:12:00] that individuals, many times, as you know, human resources professionals are the ones who are always looking to make sure that the rest of the, the company's got access to learning and and development.

We need to make sure that those. Chief Human Resources officers are looking internally at their departments and making sure they're upskilling the human resources professionals that they have as well too. That is critically important to retaining your staff as opposed as well as attracting talent.

People wanna be at an organization that is going to invest in them in the learning and development. So that is a, a really important point that you bring up. And there are certainly access to lots of information and lots of coursework and, and things that are out there in the marketplace to help upskill individuals.

It's about making the investment and giving people time as well to do that. Really important.

Mo: And how do you square up this, this difference? You know, imagine you've spent your life and your career saying, I wanna be in HR, and now all of a sudden you have to learn technology. [00:13:00]

Dawn Fay: That's right. It's a new skillset.

But I think as we all know, technology has, has kind of crept into every, uh, discipline I think that is out there in the workforce and certainly into our personal lives. Right? I mean, you, you're kind of walking around with your phone, which is basically a computer in your pocket. Uh, and those are. You know, you, you kind of think back not all that long ago before we had the ability to do what we do today, uh, just on a, on a telephone.

Right. So it's different though, and I think for individuals it's about adapting and learning and um, and growing. But I think what we have seen as we've talked to human resources professionals, you know, around the country and really around the globe. They're really excited about it because human resources has just taken on, um, a really different, active, proactive, I would say, role within organizations where they're really business partners Now, with the different managers in different departments, they're, they're just more involved than they ever have been.

I [00:14:00] know sometimes. People have thought, you know, human resources were sort of a place you went when you got in trouble in an organization, and that's not the case anymore. It is forward thinking. It is helping organizations to plan and to strategize, and they've got data right now. You've got access to data and that's really important to showcase to the rest of the company.

You know, who maybe is performing, who have you hired that's working well? How are you retaining people and how you can help do that and how you can help. With the learning and development of people throughout the organization, and that's really powerful. So in as much as there's change and, and you do need to learn a lot of new skills now and have those, uh, the tech savviness, uh, I think individuals have found that it has opened up all new doors for them in a really exciting way for the human resources professions.

Mo: So if we zoom out a bit, because at Robert Half, you don't just focus on HR rules. Is AI becoming table stakes for all roles?

Dawn Fay: You know, AI is certainly [00:15:00] becoming, uh, a very important skillset, certainly in the IT sector as you might imagine. Uh, but in accounting and finance, in core administrative roles, uh, throughout the legal profession, in marketing and creative and, and all the, the, the areas that we service, we have seen.

AI and other technology skills, right? This has been kind of happening for a while now. Be really important, but also what I would say is as important, and you might not think it kind of goes along with it if you're, if you're looking at technology, is those communication skills, those interpersonal communication skills, because technology has actually brought everybody closer together and the ability to be able to communicate.

Internally as well as externally with customers has just become really important. So it's not just about those tech tools and, and technology, it's what you can glean from that technology and how you could then communicate that and action from that. Uh, those [00:16:00] interpersonal skills are as important as they have ever been, uh, in the marketplace as well too.

Mo: Okay. Well thank goodness for that. 'cause that's my business. All right. So, um, as AI becomes more embedded in HR technology, what new skill sets are beginning to show up in HR job descriptions and compensation packages?

Dawn Fay: Well, we are seeing, as we kind of mentioned in those HR IS roles, right? The, the skill sets of.

Project managers, they're, they're looking for project managers to actually help implement the technology, which is, uh, very, very interesting. And I, I think something that we're gonna continue to see, but there's also the analytical piece of it. So the, um, the access to data that you can get now is really something that is calling now for those analyst skills, those.

Ability to, again, take data, analyze it, and then action it. Uh, and we're also seeing though the kind of AI ethical governance, right? There's a lot now around ai and [00:17:00] what are we using it for and how are we using it? So those are some new roles as well that we're seeing. That's. That's interesting and skill sets that are kind of coming up and popping up.

And I think that, again, it's early days, uh, with AI, as we all know, and I think it's gonna continue to evolve and we're gonna continue to see more skills, uh, that are gonna come into play.

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Mo: SHRM And how can HR RM make the best use of the latest compensation technology tools or AI to set and track competitive pay ranges?

Uh, and what are some of the more [00:18:00] popular tools out there for small to mid-size, uh, uh, large enterprise firms?

Dawn Fay: Well, it's, it's really all about knowing the market, and I think when you talk about knowing salaries, again, we spoke about the Robert Half Salary Guide. It is a really good tool because it not only gives you salaries for.

Functional roles in HR and across different disciplines. It actually scales for where you are in the country knowing that if you're in New York City, that job is probably gonna pay more than if you were in, you know, Des Moines. Right. And, and, and there's so many different dynamics to that. So you've really gotta have your information at your fingertips and, and really understand that.

And I think. Again, there's so many different tools that are out there. I mean, we can kind of go on and on. So I always tell people you wanna, you wanna do your homework and you wanna do your research. Uh, you called out that there's kind of small to medium sized businesses and, and larger businesses and packages that service the.

One or the other a little bit better. [00:19:00] So I think it's important for people to really understand that and do their homework. I think it's really, really important for individuals to, uh, to tap their network when you're looking to go for, to a new system. Uh, it's important to talk to people that maybe have already made the, made that conversion and they're there to understand what they like and the features and benefits and talk, you know.

Throughout your network and, and talk to individuals that have kind of used some of these tools. But you know, it's, it's, again, as we said, these technology tools can help you get access to information faster. So that tedious work of trying to gather a lot of information that, uh, that people had to do before, you can now kind of get it at the at, at the kind of press of a button, if you will, if you've got the right systems in place for you, and that can help you track.

Are you, you know, kind of after the right people, do you have the right salary ranges? Are you retaining people? Are they performing appropriately? What does all that look like? So there's lots of metrics that can get tracked along the way, and I think, again, [00:20:00] that's where the human resources departments have gotten really, really involved now in helping the overall organization, uh, with these data points in different ways, using the technology tools, which can be very beneficial for people to retain top people.

Mo: So we talked about compensation versus the total rewards package. What's more heavily influencing people these days?

Dawn Fay: Well, I, I think that that is definitely something that people need to communicate about because for different people in different PO points in their life, those, those priorities can shifts, right?

So it's not always about the highest salary. For some individuals, it might be about the flexibility. Right now. Other individuals might be very, very, um, into learning and development. And they wanna know that they're gonna be with an organization that is going to, you know, give them access to new skills and, and send them to classes and to webinars and to allow them to be, you know, part of different things.

So it [00:21:00] really varies and that's why it's so. Important through an interview process that people are talking to individuals about what is most important to them at that point in time. And I always tell people too, it's really important that you're having those communication as well with your current staff because.

The best way to attract good people is to have good people on the team and not have constant turnover. That can be very stressful for anybody in an environment. So I always tell people it's like you wanna sort of re-recruit your staff, that you have your current staff, and then also make sure obviously, that you're, you're kind of thinking.

Total compensation package, that total rewards packages we talk about for any potential individuals coming into your organization. So it could have a lot of different looks and those priorities can be, uh, very different for different people at different stages of their career.

Mo: It's the first time I hear this, uh, concept of re-recruit your staff.

I think it's just brilliant. Love it. Love it. Thank you. [00:22:00] So in the context of, uh, what we discussed about this notion of flexibility or not, what are some strategies organizations are using? To really double down on this notion of flexibility.

Dawn Fay: Flexibility is something that I, I think is here to stay. Uh, certainly, uh, was we kind of came out of COVID, um, and during COVID everybody was remote.

And then kind of as you came out of COVID, it was sorta who's where and who wants to be where. I think there's a balance. I think that, um. Many individuals had found that it was really hard to onboard and train individuals that were fully remote. So companies have have taken a tact of maybe when you're newer to the organization you need to be in, whether that's full-time or full-time for a certain period of time till you kind of get up to speed, learn the culture, learn the company, learn the team, learn the tools, et cetera, and then you can have some more flexibility.

Other individuals might come to an organization with a very [00:23:00] specific skillset, and that skillset overrides everything else. And that person can be anywhere because they already know that skillset and, and they're able to sort of plug into an organization. So it really varies. Uh, but as I said, it's something that means different things to different people at different times in their career and even at different times during the year.

So letting, uh, letting people know. What you know, what you really are looking for and seeing if you can kind of strike that right balance of flexibility. But I think it's important that people realize flexibility just means you're working from somewhere different. You're not not working. And I think that that is really important.

Mo: And I wanna go back to retention for a second 'cause I think it's a really important topic. What are some of the retention strategies that you've seen work best?

Dawn Fay: You know, I think for retention, what's really important, people wanna feel connected to their organization. They [00:24:00] wanna feel that they're doing meaningful work.

So recognition is really important and I think that goes a long way with retention. Certainly compensation is important, but recognition is just as important as is learning and development. The people, again, want. To know that a company is invested in them just like they're invested, uh, in the work that they're doing.

So retention can, can really start with recognition. It can start with good communication to understand what people want to do and where they wanna take their career, and then how can you support them and how can you get them there. Something that people have done that's been really effective is, is sort of this internal mentorship and internal.

Training and upskilling, if you will. There might be, you know, individuals that have been with the company a long time that have just great knowledge of what that organization does and how they do it. And then you might have somebody new to the organization that brings a new skillset, and maybe that's a technology skillset, whatever that [00:25:00] might be, and how do you partner those people up and create those relationships and create that internal collaboration and training.

But I think so much of retention is about people feeling connected. Appreciated, uh, to the organization. And I just think sometimes organizations just miss on that piece of it. And, uh, and it's one that they should really focus and strategize on.

Mo: And what are some good ways to ensure that people feel connected to their organization?

Dawn Fay: Communication, right? Communication is key. And I think when, when people hear recognition again. Pay is important. And if there's a way to, to give people, you know, bonus dollars and things for doing something, that's great. But if you can't, 'cause some organizations may, may just be in a position where they're unable to, to give any extra compensation dollars out.

You know, thank yous go a long way. Uh, there's ways to recognize. People in, you know, in group settings from an individual standpoint. Um, there's ways, uh, to just, [00:26:00] you know, say thank you and, uh, and really to mean that, uh, you know, there's little things that you could do from, you know, whether it be gift cards and whatnot.

You could give people more flexibility or maybe some more time off. You can send people again to, to, um, events. And to networking opportunities and to, um, webinars or into, you know, networking events that are, that are local where they can, again, meet people, represent the organization, learn new skills, build their network.

I mean, there, there's lots of different things that people can do. Training, um, is certainly another one. You know, mentoring as we talked about, you know, whether there be leadership opportunities, growth opportunities or things just to. To learn new things in a different department within an organization and putting people on rotational programs.

So, uh, I can go on because there's a lot of 'em, and I think it's important for companies just to, to really sit and strategize and think about that.

Mo: So looking ahead for to the next few years, how do you expect HR [00:27:00] compensation and talent demand to evolve, and what should CHROs be preparing for today?

Dawn Fay: I think HR is in just a really exciting place, and I think the the new skills from technology and strategy.

Analysis that's there, I think that's gonna continue to evolve. And I think as there's a demand for more skills and newer skills, that tends to increase compensation as well too. As we said, sort of supply and demand of that talent as well as new skills that are deeded, uh, I think is gonna put HR, uh, really.

Just at the center of organizations in those strategy meetings, in the workforce design stages with partners from other departments. That whole retention I think is critically important. I think learning and development is gonna continue to be, uh, important. I think, you know, we saw benefits take on, um, a whole shift as we moved [00:28:00] through COVID with health and wellness being more.

Important for individuals, you know, DEI initiatives. So there's so much that's kind of happening that's in that human resources bucket now that, you know, makes it, um, complex more so probably than it ever has been, but I think really exciting. So I think for, uh, you know, chief. Human resources officers, they've gotta make sure that they are thinking about how do they upskill their team?

How do they continue to onboard good talent to attract talent and retain that talent and, uh, and really be strategic about the makeup of their team so that they can have a successful human resources department that can really help their entire enter.

Mo: All right. And our last question, what is one piece of advice that has shaped your work or personal life?

Dawn Fay: Early on in my career, I don't even remember where or who said this to me. Um, somebody said, always be a rookie. And I have carried that with me personally and professionally. 'cause when you're a rookie at something, you know, you're [00:29:00] trying to make the team, you're trying to learn everything that there is to learn, and you wanna learn from everybody and, and you're just open.

You're open to coaching, you're open to new ideas, and you are just. Giving it your all to sort of make, make the team, if you will. And I just think if people have that mentality throughout their career and probably throughout their personal lives as well too, you're gonna find that you're always open to feedback.

You're always trying to get better. You're always out there practicing, you're always trying new things. Uh, and I just think that helps you be better. So it is, it has been something that has stuck with me for many years and uh, that would be my advice to people. Always be a rookie.

Mo: Always be a rookie. I love that.

And that's where we'll end it for this episode of People and Strategy. A huge thanks to Don for your valuable insights.

Dawn Fay: Thank you so much for having me.

Mo: Thanks for tuning in. You could follow the People in Strategy podcast wherever you get your podcasts. Also, podcast reviews have a real impact on podcast visibility.

So if you enjoyed today's [00:30:00] episode, leave a review to help others find the show. Finally, you could find all our episodes on our website at SHRM dot org slash podcasts. And while you're there, sign up for our weekly newsletter. Thanks for joining us. And have a great day

Dawn Fay: SHRM.