WTW’s latest Salary Budget Planning Survey shows U.S. salary budgets for 2026 holding steady at 3.4%, matching the actual increase achieved in 2025. Of the 36,960 global respondents (1,876 from U.S. organizations), 62% have maintained original pay‐budget projections set mid‐year, while 6% have raised and 21% have lowered budgets. Cost management concerns and recession fears each influence 36% of those making cuts, with 32% citing labor market tightness and 25% pointing to inflation. Voluntary turnover has declined to 10.1% over the past year, prompting companies to direct limited budget capacity to critical talent retention and address pay compression. Employers are also focusing on improving the employee experience (50%), expanding training (43%), enhancing health and wellness benefits (42%), increasing workplace flexibility (35%) and adjusting compensation program design (32%).

Willis, a WTW business, and Oxford Analytica identify five major economic risks facing defense contractors: the tension between scale and sovereignty, tariff wars disrupting supply chains, dependence on Chinese materials such as rare earths, phantom spending where budget pledges fail to materialize, and challenges in reindustrialization. The report, based on senior‐executive interviews, warns that debt‐to‐GDP ratios exceeding 100% across Europe, North America and Japan could trigger social backlash against defense spending and fiscal strain through inflation or financial repression. Sam Wilkin, director of political risk analytics at Willis, notes that state-sponsored violence has surged procurement needs and reshaped global defense supply chains, underscoring the importance for companies to adapt operations and long‐term planning to this evolving risk landscape.