Salary Structure Adjustments: How Much to Move Your Ranges for 2027

Salary Structure Adjustments: How Much to Move Your Ranges for 2027

It's September, which means Finance has already asked you the question: "How much are we moving the structure next year?" And if your organization is like most, someone in the room will answer with the merit budget number — 3.5%, maybe 3.6% — because that's the figure everyone has memorized.

That answer is almost always wrong, and it's wrong in an expensive direction. Your salary structure adjustment and your salary increase budget are two different decisions, funded from two different places, driven by two different data sets. Conflating them is how organizations end up with ranges that drift below market, minimums that quietly strand a third of the workforce, and a compression problem that takes three years to unwind.

This guide walks through how to set your 2027 structure movement: what data actually drives the number, how to age your survey data correctly, what the current market says, and what it costs you when the structure moves and pay doesn't.

TL;DR

• A salary structure adjustment moves your range minimums, midpoints, and maximums. A merit budget moves individual salaries. They are separate decisions with separate costs.
• Structure movement typically runs below the salary increase budget — often 0.5 to 1.0 points lower — because ranges track market movement, not total spend.
• For 2027, U.S. salary increase budgets are projected at roughly 3.2% to 3.6% depending on the survey, while BLS wage growth has cooled to 3.1%.
• Age your survey data to your structure's effective date before you decide anything. Nine months of aging at 3.1% is a 2.3% adjustment on its own.
• Budget separately for minimum breaches. Moving the structure pushes some employees below the new floor, and fixing that is a real, non-optional cost.

Structure movement is not your merit budget

Start here, because everything else depends on getting this right.

Your salary structure is the set of ranges that define what each grade is worth. Adjusting it means moving the minimum, midpoint, and maximum of each range. Nobody's paycheck changes when you do this.

Your salary increase budget is the money you distribute to employees through merit, promotions, and equity adjustments. Paychecks absolutely change when you do this.

These get confused because organizations often move both by similar percentages in the same planning cycle. But they answer different questions. Structure movement answers "what is this work worth in the market now?" Increase budget answers "how much can we afford to spend on people this year?"

Market movement is usually the smaller number. Your increase budget includes promotions, off-cycle corrections, and equity fixes that have nothing to do with whether the market rate for an accountant went up. That's why structure adjustments commonly land half a point to a full point below the total increase budget.

When you set them equal by default, you overspend on structure. When you set structure to zero because "the budget is tight," you get two or three years of drift and then an expensive catch-up.

What the 2027 data actually says

Three independent sources give you the range to work inside.

WorldatWork's survey of 1,799 organizations put 2027 projections at 3.6% — the fourth consecutive year without an increase in the projection, and identical to the 3.6% actual for 2026. Mercer's QuickPulse survey of 1,001 U.S. organizations landed at 3.2% for merit and 3.5% for total increases.

Meanwhile the Bureau of Labor Statistics reported that private-industry wages and salaries rose 3.1% over the 12 months ending June 2026, down from 3.4% in March. That deceleration matters. The ECI is the closest thing you have to an unbiased read on what the market is actually paying, and it is running below what employers say they plan to budget.

Read together: most organizations moving structures 2.5% to 3.0% for 2027 are defensible. Moving 3.6% because that's the budget number means you're probably outrunning the market.

The four-step method

Step 1: Age your survey data to your effective date

This is the step people skip, and it silently breaks everything downstream.

Survey data has an effective date. Your structure has an effective date. The gap between them is real market movement you haven't accounted for.

Say your primary survey is effective April 1, 2026, and your new structure goes live January 1, 2027. That's nine months. At the current 3.1% annual market movement, your aging factor is:

3.1% × (9 ÷ 12) = 2.3%

So before you make a single judgment call, your market data needs a 2.3% lift just to be current on day one. If you're also holding the structure for a full year, some comp teams age to the midpoint of the plan year instead — which would add another six months, or roughly 1.6%.

Decide which convention you're using and document it. Auditors, and your successor, will ask.

Step 2: Compare aged market to your current midpoints

Pull your benchmark jobs, age the market data, and calculate the gap between aged market rate and your current range midpoint for each one.

You'll get a distribution, not a single number. Some grades will be 1% behind; some will be 6% behind. Look at the median gap across benchmarks, weighted by headcount. That's your raw structure movement signal.

Step 3: Sanity-check against internal health metrics

Your compa-ratio and range penetration distributions tell you whether the structure is already sitting in the wrong place.

• Average compa-ratio well above 1.00 (say 1.05+) means people have outgrown the ranges. The structure is too low, or your grades are wrong.
• Average compa-ratio well below 0.95 means you're paying under your own structure. Moving ranges up makes that worse and inflates your minimum-breach cost.
• A large cluster near the maximum signals the same problem from a different angle.

If your compa-ratio is already low, a smaller structure move plus targeted individual adjustments beats a large uniform move.

Step 4: Move the structure and rebuild the ranges

Apply your percentage to the midpoint, then rebuild the minimum and maximum from the range spread — don't just multiply all three points and hope the geometry holds.

Worked example, Grade 7 with a 50% range spread:

The math: new midpoint is $92,000 × 1.03 = $94,760. New minimum is $94,760 ÷ 1.25 = $75,808, rounded to $75,800. New maximum is $75,808 × 1.5 = $113,712, rounded to $113,700.

Round consistently — to the nearest $100 for most structures, nearest $500 for executive grades. Inconsistent rounding is how ranges quietly stop lining up with each other.

If your grades themselves are the problem — not just where the ranges sit — structure movement won't fix it. That's a job evaluation question, and PointFactors scores jobs against weighted compensable factors so your grade assignments are defensible before you start moving money.

Budget for the minimum breaches

Here's the cost nobody puts in the plan.

When the minimum moves from $73,600 to $75,800, every employee paid between those two numbers is now below their range floor. In most organizations you cannot leave them there — it's a compliance risk, it's a retention risk, and it makes your structure a fiction.

Run the numbers before you commit. If you have 800 employees and 4% of them fall below the new minimums, needing an average of $1,400 each to reach the floor:

32 employees × $1,400 = $44,800

That's real money, it's separate from your merit budget, and it has to be spent on January 1 rather than distributed across the year. Larger structure moves produce disproportionately larger breach costs, because the population stacked just above each minimum is usually dense.

What breaks when you move structure and not pay

Moving ranges without moving salaries has predictable consequences.

Compression gets worse. New hires come in against the new minimum while incumbents sit at last year's salary. Pay compression is the most common and most corrosive outcome, and it usually surfaces as a resignation before it surfaces as a report.

Compa-ratios fall across the board. If the structure moves 3% and salaries move 3%, compa-ratio holds flat. Move the structure 3% and give 2% increases, and every compa-ratio in the organization drops about a point. Do that twice and your "competitive" structure describes an organization that pays under it.

Green-circle rates multiply. Those minimum breaches are green-circle rates, and left unaddressed they undermine the credibility of the whole structure.

The fix isn't to skip the structure move. It's to fund the structure move and the increase budget as one connected plan, and to model the compa-ratio outcome before you present either number.

When a uniform move is the wrong answer

A single percentage applied to every grade is clean, easy to explain, and sometimes wrong.

Consider differentiated movement when:

• Market movement varies sharply by job family. If engineering benchmarks aged 4.5% and administrative benchmarks aged 2.0%, one number serves neither.
• You have distinct geographic structures. Pay zones move at different rates. Applying a national number to a Bay Area structure and a Midwest structure produces two wrong answers.
• Lower grades are under minimum wage pressure. Statutory minimums in several jurisdictions are rising faster than market wage growth, which can force a larger move at the bottom of the structure regardless of survey data.

Differentiated movement costs you simplicity and invites "why did their grade move more than mine?" Be ready to answer that with data, not with a policy statement.

FAQ

How much should we adjust our salary structure in 2027? For most U.S. organizations, 2.5% to 3.0% is defensible, with the full range running roughly 2.0% to 3.5%. Anchor on your own aged survey data rather than a published average. Published budget figures (3.2% to 3.6% for 2027) describe total spend, not market movement.

Is the structure adjustment the same as the merit increase? No. The structure adjustment moves range minimums, midpoints, and maximums. The merit increase moves individual salaries. Structure movement is usually the smaller number because the increase budget also covers promotions and equity adjustments.

How often should we adjust salary structures? Annually for most organizations. Some review every 18 to 24 months in stable markets, but annual review is standard because survey data ages continuously and drift compounds. If you skip a year, expect a larger and more disruptive correction later.

What if we can't afford to move the structure at all? Document the decision and the market gap you're accepting. A zero-movement year is survivable once. Two or three consecutive zero years produce ranges that no longer describe your market, minimums below your own hiring rates, and a catch-up cost far larger than the annual moves you skipped.

Do we move minimum, midpoint, and maximum by the same percentage? Move the midpoint by your adjustment percentage, then rebuild the minimum and maximum from your range spread. Applying the same percentage to all three points works only if the spread is unchanged — and it drifts the moment you round.

What data should we use to set the number? Three inputs: your own aged survey data for benchmark jobs, published budget surveys for context (WorldatWork, Mercer, WTW), and the BLS Employment Cost Index as an unbiased read on actual wage movement. When they disagree, weight your own data highest.

Get the grades right before you move the ranges

A structure adjustment assumes your grades are correct. If jobs are slotted into the wrong grades, moving all the ranges 3% just relocates the error — and every year you repeat it, the error compounds into real pay inequity.

PointFactors scores every job against weighted compensable factors, so your grade assignments rest on documented, consistent evaluation rather than history and negotiation. That makes your structure adjustments defensible to Finance, to employees, and to a regulator.

Book a demo and see what your job architecture looks like when the point scores drive the grades.

Justin Hampton is founder and CEO of PointFactors.