Stable Salaries and Lower Turnover Signal a Shift in Canada’s Technology Sector

TAP Network’s 2026 Tech Salary and Total Rewards Report finds salary growth holding at 3.5% as employee turnover declines, AI skills become harder to recruit for and hybrid work becomes an established operating model.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Canada’s technology talent market is entering a more selective phase, with salaries continuing to grow at a measured pace, employee turnover continuing to decline, and organizations becoming more targeted about the skills and capabilities they need.

Five 2026 Tech Compensation and Workforce Trends

• Canadian tech salary increases remain at 3.5%
• AI skills jump from 17% to 25% among hardest-to-recruit skills
• Tech turnover falls from 13% to 7% in three years
• 71% of tech organizations remain hybrid
• Canadian tech employers are shifting from job-based thinking toward capability-based workforce planning

The 2026 TAP Network Tech Salary and Total Rewards Report, based on data from more than 190 Canadian technology companies and 26,700 employees across 351 jobs, shows median salary increases of 3.5% in 2026, consistent with the previous two-year reporting cycle. However, base salary growth tells only part of the story. Turnover has fallen to approximately 7%, down from 13% three years ago, while AI has risen from 17% to 25% among the skills employers identify as the hardest to recruit.

"The headline isn’t really that salaries moved 3.5%. The more interesting story is what is happening underneath that number,” said Sachi Kittur, CEO, TAP Network. “Employees are moving less, AI capabilities are becoming harder to find, and organizations are being much more deliberate about where they invest in talent. For People and Culture leaders, this changes the conversation. It is no longer simply about what a job is worth today. We need to understand what work and capabilities will create value next, and whether our workforce is ready for that shift.”

Salary growth remains measured

The 2026 data points to a compensation environment characterized by measured growth rather than acceleration.

Median salary increases of 3.5% point to continued discipline in the compensation market, with organizations forecasting a similar 3.4% median increase for 2027.

At the industry level, High Tech continues to lead at 3.6%, followed by Retail & Wholesale at 3.4%.

The pattern points to measured and conservative market growth with organizations balancing overall compensation discipline and targeted investment in capabilities that are increasingly important to business performance.

AI skills continue to be hard to find

One of the clearest shifts in this year’s data is the continuing difficulty organizations report in recruiting AI capabilities. Artificial intelligence rose from 17% to 25% among skills identified as hardest to recruit, now ranking third behind sales at 38% and leadership at 44%.

“We are moving very quickly from a conversation about AI tools to a much bigger conversation about workforce capability,” said Kittur. “The organizations that get this right will need to understand where human expertise becomes more valuable, where new capabilities need to be built, and where work itself needs to be redesigned.”

The question for employers is becoming less about which jobs AI will replace and more about which capabilities will create value in an AI-enabled workforce.

Outside of AI-specific roles, Implementation Consultant, Hardware R&D Engineering Director, and Product/Brand Marketing Director have the most headcount growth, reflecting the changing mix of skills organizations need as technology, customer expectations and business models evolve.

Lower turnover changes the retention conversation

Another notable finding is the continued decline in turnover across the Canadian technology sector.

Turnover in 2026 is 7% compared with 13% three years ago.

For employers, lower turnover can provide welcome stability. However, it also raises a more complicated question: are employees staying because they are engaged and committed or because there are fewer external opportunities for growth and movement?

As employees navigate a more cautious labour market, organizations may be facing a different retention challenge. People and Culture leaders are increasingly thinking about how to maintain engagement, career growth, internal mobility and performance among top performing employees who may become retention risks when market conditions change.

Hybrid work is an operating model, not a temporary response

The hybrid workplace has also continued to evolve.

In the 2026 survey, 71% of participating organizations reported a hybrid model, compared with 26% fully remote and 2.6% fully onsite. Among hybrid organizations, three days onsite per week is most common, compared with two days onsite in 2025.

As organizations move beyond the initial debate over remote versus in-office work, the focus is increasingly shifting toward how work gets done.

For People and Culture leaders, that means asking more practical questions: Which work benefits from being together? When does in-person collaboration create value? How should teams collaborate across locations? And how can organizations make time together purposeful?

The data suggests that hybrid work is no longer simply a workplace policy question. It is increasingly part of broader workforce design, collaboration and organizational effectiveness.

From compensation benchmarking to workforce intelligence

Taken together, the findings point to a Canadian technology workforce that is becoming more stable while the skills and capabilities organizations require continue to change.

For People and Culture leaders, the implications extend beyond annual compensation benchmarking. Understanding what organizations pay remains critical, but increasingly those decisions need to be connected to where skills are emerging, how work is changing and which capabilities organizations will need next.

The 2026 TAP Network Tech Salary & Total Rewards Report provides the data to help leaders benchmark their organizations and a starting point for the broader workforce decisions ahead.

About TAP Network’s Tech Sector Salary and Total Rewards Report

TAP Network partners with Marsh (formerly Mercer) to produce an annual salary and total rewards survey focused on the Canadian tech sector, reporting on local and national salaries, total compensation, detailed policy data, and more. Survey participants include startups, scale ups and large multinationals representing a broad cross section of subsectors such as software products, AI, clean tech, hardware design and manufacturing, VFX, animation, video game and interactive digital media and more. Survey submissions were collected in Spring 2026 and results were published in September 2026.

Learn more about TAP Network’s Salary and Total Rewards Survey here.