Explore the pay trends expected to shape 2025 rewards. Organizations are focusing on personalized and flexible benefits, pay transparency and sustainable reward practices.
2025 budget increases are expected to be slightly lower than those of recent years. Organizations are focusing on adapting salary structures, regional retention strategies, emphasizing personalized benefits and sustainability in rewards.
Trends in employee pay
Employee pay isn't only important to employees. Organizations also rely on compensation programs to support many objectives. Reward professionals have charted new approaches to pay and rewards, effectively elevating their value as decision makers in attracting, engaging and retaining key talent that moves the business forward.
Planned salary budget increases
Inflationary pressure, concerns related to cost management, and the anticipation of a recession or decline in business results are among the top factors influencing budget plans for 2025. This is a departure from the prevalent concerns of recent years when business leaders were contending with tight labor markets and evolving employee expectations. As a result, many organizations are preparing for 2025 budget increases that are slightly lower than that of recent years but more in line with the actual spend they've made in 2024.
Functions within the industry that are seeing the fastest and slowest compensation growth
Changing labor market and economic conditions as well as socio-economic trends have increased the pressure on organizations to update their pay programs, according to the results of our 2024 Pay Effectiveness & Design Survey's global results. The following charts show job families (functions) that are seeing the fastest and slowest compensation growth.
Changes to base salary structure design
Most respondents to the global Pay Effectiveness & Design Survey indicated that they have already made changes or are planning or considering making changes to their base salary structure design through fundamental shifts.
Compensation communication
Multiple factors are encouraging increased levels of pay program communication within organizations.
Factors affecting increased levels of pay program communication
International and global organizations generally approach the way they communicate pay program information on an organization-wide basis, with local variation where required.
Trends in attraction and retention
Employee attraction and retention is one of six core objectives for pay programs in organizations around the world, especially as employees are most likely to say pay is a driver of attraction and retention, according to WTW's 2024 Global Benefits Attitudes Survey.
Drivers of attraction and retention
Average voluntary attrition rate, by region
These general industry findings indicate that voluntary attrition rates vary by region, with the highest rates in North America (9.2%) and the lowest in Central & Eastern Europe (4.7%), highlighting the importance for clients to consider regional differences in employee retention strategies.
41%
of organizations report labor shortages in multiple talent
segments.
In-demand jobs and skills
It's interesting to see the variation in in-demand jobs and in-demand skills. Sales and compliance management skills are among the top 3 in-demand skills in every region.
Highest and lowest headcount expectations, by industry and region
Organizations are sharing pay information with job candidates
Two-thirds of organizations around the world are already or are planning / considering communicating pay rate or pay range information to job candidates, according to our 2024 Pay Transparency Survey's global results.
77%
of organizations are more likely to communicate
the hiring rate / range for the job to external
job candidates.
56%
of organizations apply a consistent approach for all job
levels and types to external job candidates.
Organizations with operations in locations with increased legislation tend to apply a more consistent approach across the entire enterprise when sharing pay rates and ranges with prospective employees.
Locations sharing pay rates and ranges with prospective employees:
- 86% of U.S. employers
- 63% of UK employers
- 60% of EU employers
- 58% of Canadian employers
Trends expected to shape 2025 rewards
01
There is a growing emphasis on personalized and flexible benefits,
with a stronger focus on mental health and well-being support.
02
Technology and data analytics are being integrated to tailor
rewards programs more effectively.
03
Organizations are moving toward a holistic total rewards package
that includes financial, physical and emotional well-being.
04
Sustainability and social responsibility are becoming more
important in reward offerings. Companies are incorporating
incentives for eco-friendly practices and recognizing employees who
contribute to social causes, aligning rewards with these
values.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
