Rising pay transparency regulations, stagnant salary budgets and growing use of digital tools to strengthen workforce capabilities combined to shape 2025’s employee pay and workforce strategies. These forces have applied pressure to organizations globally to balance cost control with employee expectations while rethinking rewards to build trust and optimize spend.
Drawing on the results of WTW’s latest global compensation survey data and regional insights, we explore the trends that will define the future of pay in the private equity (PE) sector — and what they will mean for HR leaders this year.
Economic indicators across Europe, North America and Asia Pacific show a cooling environment for pay planning: Inflation is trending downward globally, but median salary budget increases remain relatively flat (Table 1).
| Region/country | 2025 Actuals | 2026 Projected |
|---|---|---|
| Continental Europe | ||
| Luxembourg | 4.4% | 4.3% |
| Belgium | 4.6% | 5.1% |
| France | 3.1% | 3.1% |
| Germany | 3.5% | 3.4% |
| Netherlands | 3.6% | 3.5% |
| Spain | 3.4% | 3.2% |
| United Kingdom | 3.5% | 3.5% |
| North America | ||
| Canada | 3.5% | 3.4% |
| United States | 3.5% | 3.5% |
| Asia Pacific | ||
| Singapore | 4.0% | 4.0% |
| Hong Kong | 3.6% | 3.9% |
GDP growth varies widely, with some key European and North American economies showing low growth figures. Unemployment is rising in most regions, except Asia Pacific where labor markets remain more stable.
These dynamics point to ongoing cost pressure in mature markets and stronger talent competition in faster growing regions. This requires compensation strategies that balance affordability with market agility.
Looking forward, we anticipate that salary increases will continue to be more subdued for PE globally, with the forecasts from WTW’s 2025 Private Equity Global Pay Practices Report standing at 3.2% for 2026. There will be some variance among markets, and it’s important to be mindful that differences among roles also will exist.
We continue seeing a strategic focus on the distribution of salary budgets that concentrate on jobs that are the highest in demand. Based on an analysis of WTW’s Private Equity Compensation Surveys from 2023 to 2025, we see a continued emphasis on corporate social responsibility (CSR) globally, with environmental, social and governance (ESG) efforts increasingly shaping investor decisions.
PE firms invest heavily in investor relations-related roles to strengthen client relationships and maximize the funds available to invest. Demand for investment roles holds strong as front-office teams directly drive fund profitability.
Fund accounting, HR and legal roles also are seeing stronger demand, with fund accountants facing rising compensation due to the need for expertise in complex structures and regulatory reporting. Our research on emerging roles confirms an increased focus on data and technology, with data scientists now among the most in-demand specialties (Table 2).
| Emerging roles | |
|---|---|
| 1. | Data scientist |
| 2. | Data engineer |
| 3. | Machine learning engineer |
| 4. | Data architect |
| 5. | Cybersecurity analyst |
| 6. | Communications strategist |
| 7. | Business intelligence analyst |
| 8. | ESG manager |
| 9. | Chief of staff |
| 10. | Innovation manager/strategist |
ESG capabilities also are rising, reflecting the growing expectation that firms — as well as their portfolio companies — operate sustainably and responsibly (Table 3). To secure these emerging skills, many PE firms may need to look beyond their traditional talent pools and recruit from outside the sector.
| Prevalent skills | Emerging skills | |
|---|---|---|
| 1. | Financial modelling and valuation | Artificial intelligence/machine learning |
| 2. | Financial analysis | ESG strategy |
| 3. | Investment due diligence | Data governance |
| 4. | Market analysis | Digital transformation |
| 5. | Relationship management | Cybersecurity risk management |
Pay across investment teams largely stabilized or declined in 2025, according to WTW’s 2023 to 2025 private equity compensation surveys, with most regions showing limited movement after robust increases seen a few years ago.
Junior roles continued to receive the strongest base salary growth, while senior positions saw more modest rises. Markets such as the UK, France and Germany showed clear plateauing, with the Benelux Region (Belgium, the Netherlands and Luxembourg) lifted mainly by inflation‑linked indexing.
Variable pay followed a similar pattern: Bonuses generally flattened or fell, with the UK and North America seeing broad reductions except for junior roles; France showing a slight recovery in 2025; and Germany’s gains being focused on senior levels. In Hong Kong, bonuses dropped across the board, while Singapore remained mostly flat or slightly down year-on-year.
Investment focus can play a pivotal role in compensation levels. Our data shows that mid-market buyout professionals earned a noticeable premium, with total compensation around 9% higher across a Pan-European sample and up to 22% higher in France.
In contrast, venture capital-focused roles typically sat below the broader market in both base salary and total compensation — especially at median. This gap was partly driven by scale: Mid-market buyout funds generally manage larger asset pools than VC firms, and compensation trends tend to rise in line with assets under management.
The defining feature of a typical PE pay mix is carried interest, which gives professionals a share of fund profits — effectively creating a powerful incentive to drive sustained investment performance.
Carried interest typically sits around 20% — rising to 30% in some venture funds — and often scales with fund performance, according to WTW’s 2025 Carried Interest Report. Carried interest generally is shared across the investment team, though eligibility for analysts and support roles varies. Senior leaders (e.g., managing partners) receive the largest portions.
While carry remains a major part of total compensation, its tax treatment is under increasing scrutiny. The UK will shift to taxing carry as income from 2026, while the U.S. continues to debate changes without implementing anything.
At the same time, ESG considerations are becoming strategically important. In response to growing expectations from limited partners, many PE firms are integrating ESG criteria into governance, investment processes and even carry structures.
Regulatory and compliance pressure is rising. The EU Pay Transparency Directive (EUPTD) requires all 27 European Union member states to transpose the directive into their national laws by June 7, 2026.
In the U.S., pay transparency requirements have recently come into force in areas with significant economies, like New York, California and Washington. Ecuador, Brazil and Canada also have recently introduced equal pay laws.
Two-thirds of organizations in Europe are prioritizing transparency, according to the results of WTW’s 2025 Pay Transparency Survey. And it’s not just for fairness, but to meet compliance standards for directives like the EUPTD.
56% of organizations are already communicating job levels to employees
44% of organizations are already communicating to employees how job levels and pay are determined
There’s an equally growing emphasis on equity and fairness as well. WTW research shows that more than one-third of companies are sharing pay equity narratives, and that’s expected to rise. Transparency and equitable practices are critical to closing gender pay gaps.
43% of organizations are planning or considering communicating pay range/compa-ratio to employees
27% of organizations are planning or considering communicating how pay compares to actual average pay of those doing equal work, by gender
Pay transparency is a global priority that extends beyond compliance, with employee reactions and manager capability emerging as key challenges. Employers must be confident that they are compliant everywhere they operate. Overall, significant work remains, making a clear vision and action plan essential.
01
Globally, salary increases are forecast to cool this year. Firms should prioritize higher increases for critical investment and portfolio roles or other growth areas.
02
Firms should consider the future requirements of regulatory updates, including pay transparency and equity. Governments around the world are asking companies to be more transparent about pay, so organizations need to prepare for a new wave of pay transparency legislation.
03
It’s worth re-evaluating to learn if short-term incentive schemes are market competitive, with individual and term performance metrics referenced.
04
The integration of ESG and impact metrics into incentive design plans ensures firms are reflecting investor priorities. Firms should prepare for increased scrutiny from regulators and limited partners about compensation structures and governance. It’s not just about compliance; it’s being ahead of the curve.
05
In an environment where pay remains a key driver of attraction and retention, greater levels of transparency are expected. And, as the cost of living continues to increase, it will be paramount for firms to ensure they are paying competitively while also clearly communicating to employees how their compensation aligns with firm/fund strategy and values.
Transparency, fairness and purpose matter more than ever — especially across a multi-generational workforce.
