A majority of employers who responded to Palmer Group’s annual salary survey want their employees working in the office, a substantial increase from a year ago and a sign of the importance bosses place on face-to-face interactions.

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“Employers have updated office spaces and they’ve done that because they want their people to be together and have that connection and collaboration,” said David Leto, Palmer Group’s president and CEO. “Will we ever get back to the way it was before COVID? I don’t think so but we’re moving to [employees being in the office] at least four days a week.”

Palmer Group, in partnership with the Greater Des Moines Partnership, Cedar Rapids Economic Alliance and Central Iowa SHRM, recently surveyed employers about a range of topics related to the employment climate in Central and Eastern Iowa. This year, responses came from nearly 150 employers of varying sizes and sectors. The majority of responses came from director-level positions or higher.

Palmer Group, a staffing and employment agency based in West Des Moines, began conducting the survey in 2013 as a way to gauge employer compensation plans in the coming year. The survey has expanded to include a wide variety of topics such as hiring plans and work options for employees. (Palmer Group will release the full survey on Nov. 3.)

One of the biggest shifts in the survey was around where employers want their employees working.

A year ago, 38% of survey respondents indicated they only offered employees the option of working full time in the office. This year, 55% of employers said they were only offering workers the option of being in the office full time.

The survey also showed that 22% of respondents offered employees hybrid work options, spending part of a work week in the office and the remainder working remotely. A year ago, 32% of respondents offered hybrid work options.

“I think people are finding that it’s healthier to actually have a divide between their home life and work life,” Chris Lorenz, Palmer Group’s executive vice president, said. Combining work and home life is “wearing people out. They want to leave work at work and home at home, that way they can be present, in the moment, for both.”

Salaries was another topic respondents were surveyed on, with 97% indicating plans of providing employees with increases in 2026. The percentage was the same as last year’s survey.

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However, 21% of respondents indicated they planned on giving average raises of 1% to 2%, an increase from last year’s survey when 14% said pay increases would be minimal. The percentage of survey respondents who said raises would range from 3% to 4% dropped to 71% from 78% last year. Five percent of respondents said raises at their firms would average 5% or more, the same as a year ago.

“Salary increases are going to be more modest than the fast and furious times of the past few years when there was a panic to do what needed to be done to get talent,” Lorenz said. “That has slowed drastically mostly because of the remote models people are walking away from.”

In the years immediately following the pandemic, when a higher percentage of employees worked remotely full time, Central Iowa employers tried to match salaries offered to people who lived on one of the coasts but whose job was with a company located in the Midwest, Lorenz said.

“Now, we’re not having to match the higher-cost-of-living cities to keep the people we employ,” he said.

The finicky economy has employers taking a cautious approach to salaries and raises, Leto said.

“Employers want to retain their employees, treat them well and provide them with a good office environment but they are having to watch those big [salary] jumps because they can’t sustain it year after year,” Leto said.

Other highlights from the survey include:

• A continued focus on retention (37%) and training (20%). The survey showed that 37% of respondents said retention was a key area of focus, the same as a year ago. Also, 20% cited training as a top priority, up from 18% last year. Succession planning gained momentum with 13% of respondents indicating it was a key area of focus, up from 10% in 2025.
• A jump in the percentage of respondents who planned to increase staff in 2026. The survey showed that 49% of respondents planned to hire additional staff, up from 45% in 2025.

The baby boomer generation – those born between 1946 and 1964 – is turning 65 and many are opting to retire rather than continue working. While employers are hiring people to fill positions vacated by retirees, the replacement process has slowed, Leto said.

“I think employers are playing it pretty conservative – they know they need to invest in hiring more people but they are thinking it could be just one or two more,” Leto said. “I think we’ll see some modest job growth in 2026 and then I think 2027 is going to be a better year once we’re through all of this uncertainty.”