How the DC Market Follows and Defies Workforce Trends

• By: Posted by HR Alliance Staff
• On: 08/24/2026 10:46:13
• In: Compensation
• Comments: 0

As headlines are dominated with news about DOGE cuts hitting the DC market, AI's impact on job functions, and the difficulty both job seekers and employers are having finding the right fit for positions, the 2026 HR Alliance Compensation Survey and Trend Report reveals a market that's calmer than the headlines suggest, except where it isn't.

The HR Alliance Compensation Survey and Trend Report is a benchmark guide for DC-metro area companies planning their compensation and talent management practices to attract and retain top talent in this highly competitive market. Now in its 38th year, the 2026 survey includes input from over 55 companies encompassing over 62,000 employees across 400 positions and 76 job families. Data was collected from April 2026 through July 2026.

The survey revealed where the market aligns with and where it differs from reported trends. 
 

• Turnover – While turnover rates have increased, DC lags behind the national average for employee turnover sitting at 8.2% versus the national average of 12.4%. 
• Compensation budgets – Annual merit budgets and annual total increase showed a decrease in the past year. Total pay increase was 3.0% as compared to 3.4% in last year's survey. The reported average merit budget increase was 2.8%. The survey did find there was a slight increase in the use of profit-sharing programs in 2026, continuing an upward trend in this area.
• AI readiness - Nearly 72% of responding organizations report using AI or machine-learning systems, while only 37% report having formal policies governing AI use. 
• Cleared personnel - The majority of firms surveyed indicated that they have positions that require a security clearance. However, after increases the last two years, the proportion of the organization that requires a security clearance was down. Premium pay was the preferred strategy for attracting cleared individuals. 

“The 2026 survey includes a variety of AI-related positions in the data, providing an up-to-date look at positions and their compensation,” said Neil Sawyer, Compensation Survey Co-chair. “Over the years, I have relied heavily on the survey to ensure internal consistency across functions and to maintain a competitive position in the market while keeping abreast of best HR practices that would keep our company on the cutting edge.”

For a detailed report of survey findings, contact staff@hralliancedc.org to secure your copy of the report today. We'll host a webinar on October 20, exclusive to participants and purchasers, to dive into the findings and answer questions about how to apply them to your organization's strategy.  

Authored by the HR Alliance Communications Team, with input from the Compensation Survey Committee.