What Total Rewards Leaders Told Us About Hourly Compensation in 2026

Last week, the Living Wage Institute team visited San Antonio, Texas for WorldatWork’s annual Total Rewards conference. Total Rewards brings together compensation and benefits professionals from across the globe tackling the most pressing issues in HR. Of course, being data nerds in a room full of total rewards leaders, we came with a few questions of our own. We ran a very (un)official, live pom-pom poll at our booth on the Expo Floor across three days. Here's what we learned.

The biggest cost pressures on the workforce

On Day 1, we asked: "What's the biggest cost driver in your employees' market?"

Housing dominated at roughly 40% of responses, followed by healthcare at 25%, childcare at 21%, and transportation at 14%. 

But the conversations were just as revealing as the votes. Several participants told us that the biggest cost driver depends entirely on where you're talking about and who you're talking about — which is exactly the point. There's no single cost driver for all markets, and that variability is precisely why our ground-up, county-level cost data matters. It lets teams build a resonant total rewards strategy that reflects the actual pressures workers face in their community.

The benefits hourly workers value most

On Day 2, we asked: "What's the most popular benefit among your hourly workforce?"

Paid Time Off led at 48%, followed by health insurance at 36%. Retirement savings, emergency savings, and transportation stipends received few votes.

For employers, part of the benefits challenge is eligibility. Hourly work often overlaps with part-time status, making some employees ineligible for benefits like health insurance altogether. But when available, health insurance tends to be the first thing hourly workers opt into, especially as premium costs have surged. Covering part or all of a health insurance premium can directly reduce a worker's basic expenses. 

PTO functions differently. As a wage substitute, PTO creates critical time off, but it doesn't change the underlying cost equation like health insurance. Both PTO and health insurance matter, but they impact the worker experience in very different ways.

The challenges facing comp teams

On Day 3, we asked: "What's your biggest challenge when planning for hourly compensation?"

Turnover led at 30%, with wage compression and keeping up with market changes tied at 27% each. 

Turnover is a math problem. When you can quantify the living wage gap in a given market — what workers need versus what they earn — you can model whether narrowing that gap through wages, benefits, or both is more cost-effective than absorbing the churn. 

The same logic applies to compression. Staying current on how costs are shifting community by community prevents the kind of catch-up investments that compress pay bands and create internal equity problems. Local cost-of-living data gives teams the inputs to plan around compression.

Pay transparency and factoring in benefits rounded out the field, and attendees told us these two challenges apply well beyond the frontline workforce, too.

The bigger picture

One thread ran through nearly every conversation we had: employers want to do right by their workers, but they're navigating doing so with limited data, especially for the hourly workforce. Most compensation data and platforms are built with salaried roles in mind, leaving a gap for roughly half of the American workforce. That's the gap we're closing at the Living Wage Institute.

If these challenges sound familiar, explore how our data can help or connect with our team to talk through what it looks like for your workforce.