Why Workers’ Financial Pressure Should Be Part Of The Compensation And Workforce Strategy Conversation
Workers are still feeling squeezed by the cost of living, and many do not feel their pay is keeping up.
According to Monster’s 2026 Cost of Living Report, 93% of workers say their wages are not keeping pace with rising costs. This marks the third consecutive year that more than 9 in 10 workers have reported the same concern, following 95% in both 2024 and 2025.
For employers, this is not only a compensation issue. It is a retention, engagement, recruiting, and workforce planning issue.
As workers cut spending, dip into savings, consider additional work, and look for higher-paying roles, employers may face rising pressure to explain how pay, benefits, flexibility, and career growth fit into the overall employee value proposition.
Key Findings For Employers
- 93% of workers say their pay is not keeping up with the cost of living, consistent with 95% in both 2024 and 2025.
- Only 7% say their employer increased pay due to inflation, down from 9% in 2025 and 11% in 2024.
- 71% say their most recent salary increase was below 3%, reinforcing a multi-year pattern of limited wage growth.
- 85% have dipped into savings, including 42% who say they have used a significant portion.
- 74% are looking for a higher-paying role, up from 62% in 2024 and 56% in 2025.
- Only 3% say they successfully found and accepted a higher-paying job, showing that many workers are searching but not necessarily finding better options.
- 58% say it is harder to find a job as companies cut costs, while 41% worry about job security.
What This Means For Employers
Cost-of-living pressure is shaping how workers think about their jobs.
Employees may stay in their current roles, but that does not always mean they are satisfied, financially secure, or disengaged from the job market. Many workers are actively looking for higher pay, considering additional work, or adjusting their financial lives to keep up with rising costs.
For employers, this creates a complicated retention environment.
Workers may be financially motivated to stay because the market feels uncertain, but they may also be open to leaving if a better-paying opportunity appears. That means low turnover does not necessarily mean low retention risk.
Employers should pay attention to the gap between employees staying and employees feeling financially supported.
Wage Pressure Is Not Going Away
Monster’s three-year trend shows that workers’ concerns about wages and cost of living have remained consistently high.
In 2026, 93% of workers say their pay is not keeping up with rising costs. While that is slightly lower than the 95% reported in 2024 and 2025, the bigger story is consistency: most workers continue to feel that their wages are falling behind.
At the same time, only 7% report receiving an inflation-related pay increase, down from 9% in 2025 and 11% in 2024.
That gap matters. When workers feel costs rising but do not see a meaningful employer response, they may question whether their organization understands the financial pressure they are under.
Financial Pressure Is Changing Worker Behavior
The report shows that workers are not only worried about the cost of living. They are changing their behavior in response.
Many workers say they have dipped into savings, cut non-essential spending, relied more on credit or loans, or reduced retirement savings. Others are considering additional work to increase their income.
These financial adjustments can affect the workplace. Employees under financial stress may experience higher anxiety, lower engagement, burnout, or reduced focus. Some may be more likely to look for outside opportunities or take on side work that affects availability and energy.
For employers, this means financial pressure can show up as a workplace issue, even when it starts outside of work.
More Workers Are Looking For Higher Pay
Nearly three-quarters of workers say they are looking for a higher-paying role, up from 62% in 2024 and 56% in 2025.
But only 3% say they successfully found and accepted a higher-paying job.
That disconnect is important for employers. Many workers may be searching, but not leaving. They may feel stuck between wanting higher pay and facing a job market that feels more constrained.
This can create hidden retention risk. Employees who stay because they cannot find a better option may still be frustrated, disengaged, or ready to leave when the market improves.
Employers should not assume that employees who remain in place are fully committed. Instead, they should look for ways to improve trust, clarify career paths, and make the current role feel more financially and professionally sustainable.
What Employers Can Do Now
Employers may not be able to solve every cost-of-living challenge, but they can take practical steps to reduce retention risk and build trust.
- Review compensation competitiveness. Employers should benchmark pay regularly, especially for roles where hiring is competitive or turnover risk is high.
- Be transparent where possible. Clear salary ranges, pay practices, promotion criteria, and raise timelines can help employees understand what to expect.
- Strengthen career pathways. Workers looking for higher pay may be more likely to stay if they see a realistic path to advancement, skill development, or increased earning potential.
- Connect benefits to real financial pressure. Benefits such as retirement support, commuting assistance, flexible schedules, financial wellness resources, or expanded healthcare coverage can help when aligned with what employees actually need.
- Train managers to talk about growth and retention. Managers may not control compensation, but they play a major role in whether employees feel valued, heard, and supported.
The Recruiting Impact Of Cost-Of-Living Pressure
Cost-of-living concerns also affect recruiting.
Candidates may be more focused on salary ranges, benefits, schedule expectations, commute costs, and long-term stability before they apply. If compensation is unclear, they may be less willing to invest time in the hiring process.
Employers can improve candidate trust by making job postings more transparent and specific. That includes clearly communicating pay ranges where possible, benefits, flexibility, work location, schedule expectations, and advancement opportunities.
This does not mean employers need to overpromise. It means candidates need enough information to decide whether the role is financially viable before they apply.
The Bottom Line
The cost of living is continuing to shape how workers evaluate their jobs.
Monster’s data shows that most workers still feel their wages are falling behind, while employer response has declined and more workers are looking for higher-paying roles. Even when employees stay, financial pressure can affect engagement, burnout, trust, and long-term retention.
For employers, the opportunity is to treat compensation as part of a broader workforce strategy. Clear communication, competitive pay practices, career growth, and a stronger employee value proposition can help employers build trust in a market where many workers are feeling financially stretched.
Learn how rising cost-of-living pressure is affecting workers, retention, job search behavior, and what employers can do to build trust.
Methodology
This survey was conducted by Pollfish on May 17, 2026, among more than 1,000 currently employed U.S. workers. Respondents answered a series of multiple-choice questions examining wages, cost-of-living pressure, employer response, savings behavior, job search activity, job security concerns, and the workplace impact of financial stress. The sample included representation across generations: 17% Gen Z, 25% Millennials, 28% Gen X, and 28% Baby Boomers. Respondents identified their gender as 54% female, 45% male, and 1% non-binary.
