Human skills hold their ground as AI reshapes what employers pay for

As artificial intelligence reshapes workplace priorities, new research suggests employers are not ready to abandon the human capabilities that keep organisations running.

A survey by The Conference Board found that 30.7% of US employers cite leadership and people-management skills as drivers of base-pay increases, while 30.4% point to data science and advanced analytics.

Both figures trail AI and machine-learning skills, which top the list at 37.8%, but they signal that technical fluency alone is not enough to command a premium in 2027.

"AI skills are commanding a premium, but the data make clear that technical expertise alone isn't enough," said Rita Meyerson, EdD, principal researcher, human capital, at The Conference Board.

"As AI becomes more embedded in how work gets done, organisations also need leaders who can guide teams through change, make sound decisions, and translate technology into business results. The workforce of the future will require both AI fluency and strong human skills."

Salary increase budgets steady

The findings come as employers prepare to hold salary increase budgets steady at a median of 3.5% in 2027, unchanged from 2026.

With limited room to move broadly, companies face tougher choices about where to direct compensation dollars, according to the report.

"Salary budgets may be holding steady, but the compensation landscape is anything but static," said Diana Scott, US Human Capital Center leader at The Conference Board.

"Employers have to make tougher choices about where limited compensation dollars will have the greatest impact. The opportunity is to move beyond across-the-board thinking and more deliberately reward performance, critical skills, and the capabilities that will drive future growth."

Where compensation strategy needs to catch up

The report warns that limited budgets are forcing employers into increasingly difficult choices.

It noted that the median "other" increase budget, a flexibility pool for promotions, pay equity, market adjustments, retention, and critical skills, sits at just 0.5%.

That constraint is sharpest around AI. The survey found that while 38% of organisations say AI and machine-learning skills are driving base-pay increases, formal pay structures have not kept pace.

According to the report, 63% still base salary ranges entirely on job title rather than skills, and just 3.4% specifically budget discretionary increases for employees who acquire in-demand capabilities.

The Conference Board recommends that C-suite and compensation leaders align pay more closely with business priorities. Its key guidance includes:

• Anchor base pay increases at 3.5%, but differentiate based on performance, critical roles, market pressure, and scarce skills rather than applying increases across the board.
• Keep merit budgets focused on performance, and use separate funds for equity, retention, promotions, and skills adjustments.
• Create clear rules for skills-based pay, defining when AI and other high-value capabilities warrant premiums or additional awards.
• Tie executive variable pay to measurable outcomes, such as financial performance, productivity gains, AI investment, and workforce transformation, rather than financial results alone.