Australian organisations are budgeting for median salary increases of 3.6% in 2027, according to Aon. That is slightly above the 3.5% median increase recorded in 2026.
The survey points to steady overall pay settings rather than a broad uplift in wage budgets. Instead, employers are directing more of that spending to specific groups, including workers in critical roles, people with scarce skills and staff seen as central to business needs.
Aon's study covered 500 organisations in Australia and examined both salary increase budgets and employee turnover rates. The results suggest that similar headline pay budgets across sectors can still produce very different outcomes for employees, depending on where companies concentrate increases.
That shift is visible across industries. Projected median salary increases range from 3.5% to 4%, with technology and retail, eCommerce, wholesale and hospitality at the top end at 4%.
Most sectors sit close to the national median of 3.6%, suggesting employers are not diverging widely on total salary budgets. The bigger difference lies in allocation, with businesses using reward decisions to address retention risks and labour shortages in targeted parts of their workforces.
Yvette O'Reilly, Associate Partner, Talent Data Solutions Business Leader, Pacific, Aon, said the focus had shifted from the size of the budget to how employers use it.
"Salary budgets remain relatively stable, but employers are becoming more deliberate about where they invest reward dollars," O'Reilly said.
"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."
Turnover gap
The data also shows a wide spread in voluntary turnover between industries. Financial services posted the highest median voluntary turnover rate in the survey at 15.6%, followed by consulting, business and community services at 14.4%.
At the other end of the range, energy recorded median voluntary turnover of 8.7%. The figures help explain why some employers are tying pay decisions more closely to attrition patterns rather than applying similar increases across the board.
Turnover data, talent availability and future workforce needs are playing a larger role in salary planning, Aon found. That approach reflects a labour market in which businesses must weigh employee movement, skill shortages and wider economic pressures at the same time.
Belinda Armenta, Head of Talent Data Solutions, Asia Pacific, Aon, said employers were navigating a more complex set of workforce decisions.
"Workforce decisions have never been more complex, making access to reliable and defensible data essential for organisations," Armenta said.
"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."
Industry focus
The technology sector's projected 4% median increase places it among the strongest salary budgets in the survey, alongside retail, eCommerce, wholesale and hospitality. That may reflect ongoing competition for specialist skills and continued pressure on employers to retain workers in customer-facing and hard-to-fill roles.
By contrast, sectors clustered around the 3.6% national median may still produce uneven pay outcomes within organisations. Workers in priority functions may receive larger increases than colleagues in less scarce roles, even where the overall wage budget appears unchanged.
The findings suggest salary reviews are becoming a more selective management tool. Rather than using wage rises as a broad response to inflation or market expectations, employers appear to be using them to solve narrower staffing problems and support retention in roles where replacement is harder or more costly.
That means the headline budget figure may reveal less about employee pay outcomes than in previous years. In an environment where the total pool has changed little, how that pool is distributed is becoming the central question for both employers and staff.
Aon's Australian study was conducted between July and September and reported median results unless otherwise stated. Sample sizes varied by measure, with responses drawn from 500 organisations across the country.