Companies in Mexico Curb Salary Growth for 2026

Companies in Mexico are tempering their salary increase expectations for 2026 amid a cautious economic outlook and evolving workforce expectations, according to Michael Page’s Salary Guide 2026. Only 62% of employers plan to raise salaries next year, and most intend to do so by between 1% and 5%, largely to offset inflation rather than deliver real income growth.

Oliver Odreman, Senior Director, Michael Page, calls the forecast as “a very moderate expectation,” reflecting conservative planning among companies as inflationary pressures ease. Inflation slowed to 3.57% in October, according to the National Institute of Statistics and Geography (INEGI), while economists expect it to close at 3.82% in 2025 and 3.92% in 2026, based on Citi’s November Expectations Survey.

Separate research by AON projects average salary increases of 5.4% for non-unionized employees and 6.4% for unionized workers next year, reports El Economista. However, regional differences persist: the Pacific, Northeast, Central, El Bajío, and State of Mexico regions are expected to see smaller wage adjustments than in 2025.

Several factors explain the cautious stance. Analysts cite uncertainty surrounding global trade dynamics, new US tariff policies under President Donald Trump, supply chain realignments, and pending labor reforms in Mexico, including a potential reduction of the workweek from 48 to 40 hours. The Finance Ministry forecasts GDP growth between 1.8% and 2.8% in 2026, while the Bank of Mexico’s November survey places expectations closer to 1.3%, signaling limited optimism.

This moderation in salary growth raises concerns about workforce engagement and retention. Nearly half of companies surveyed by Michael Page said their retention strategy remains focused on offering “competitive salaries,” even as employees increasingly value other forms of compensation. The firm found that 95% of workers consider flexibility “important or very important” when evaluating job offers, yet only 9% of organizations offer structured well-being or flexible programs.

Michael Page’s findings also point to a broader transformation in compensation priorities. “After a 2025 marked by economic uncertainty and moderate growth, salary alone has ceased to be a differentiating factor,” says Javier Torre, Director General for Mexico and Central America, Michael Page. “Today, talent expects a more complete value proposition, where traditional benefits coexist with new forms of flexibility and well-being tailored to each employee’s reality.”

Torre adds that the concept of a competitive salary must expand to include equity, recognition, and professional development. “Organizations that design comprehensive compensation schemes — combining pay, differentiated benefits and real flexibility — will be better positioned to attract and retain top talent in an increasingly competitive labor market,” he says.

Michael Page’s analysis shows that 35% of employees consider their compensation package attractive, while 52% say flexibility in choosing benefits is decisive when accepting a job offer. About 37% of professionals remain in a “zone of conformity,” neither dissatisfied enough to leave nor engaged enough to contribute fully — a dynamic that can reduce productivity and increase turnover.

To address this, 30% of companies are introducing differentiated benefits such as health insurance, savings programs, performance-based bonuses, and hybrid work options. However, these initiatives often fall short of employee expectations. Odreman warns that the lack of competitive adjustments could widen pay gaps between new hires and current employees, feeding discontent and turnover.

The report concludes that flexibility, equity, and purpose are becoming central to compensation strategies. As salary growth slows and inflation pressures ease, companies that diversify benefits and adapt to employee expectations will be better positioned to retain talent and remain competitive in Mexico’s evolving labor market.