6 trends affecting compensation strategy in European retail organisations

Table 1. Salary movement trends in Europe’s retail and distribution sector

Across industries in Western Europe, the primary driver of this dip is cost management, according to 40% of survey participants (country average). Anticipated recession or weaker financial results are also a significant concern, affecting 37% of companies. Meanwhile, 24% of respondents cited inflationary pressures for the change in salary increase budgets .

Geo-economic influences make Europe’s outlook uncertain. Furthermore, retail organisations face the emergence of minimum and adequate wage legislation across Europe and in preparation of the EU Pay Transparency Directive.

Our 2025 Pay Transparency Survey revealed that 67% of companies cited increasing regulatory requirements as a reason to implement pay transparency within their organisation. More than half of respondents (56%) said that their current course of action towards pay transparency is to inform employees about their job level. Meanwhile, 74% of survey participants said they aim to go further by disclosing the hiring rate/range for jobs to external candidates — a topic also covered under the Directive.

Roles currently in demand include sales and retail-store associates, while skills which are sought after include sales and customer management. However, retail companies may find themselves competing with other sectors in recruiting critical talent for these roles.

Retail organisations are already grappling with high turnover prompted by low compensation and inflexible hours, necessitating a reassessment of compensation structures and work-life offerings. Yet, new-hire premiums — especially among entry-level roles — are declining across Europe when compared to the more immediate post-pandemic period (Table 2). Less dynamic salary movements are a signal for retailers to assess their compensation packages more holistically to attract and retain key talent in high-demand roles.

Table 2. Pay premiums for new hires across key markets in Europe

Table 3. Top three paying Disciplines within the Professional Intermediate Career Level (P2-10/S2-10)

In particular, the United Kingdom, Ireland, Germany, Portugal and Poland reflect this increased demand for digital roles. It also is worth noting that in the Europe, Middle East and Africa (EMEA), cash compensation is the top driver for attracting digital talent, according to our research.

Optimize your talent investment

Europe’s retail organisations must closely look at various regulatory, economic and technological developments, as well as how these impact their business, demand for talent and compensation strategy. The integration of technology via omnichannel commerce reveals the need for digital talent; subsequently, organisations need to rethink their compensation strategy.

By refining salary structures and leveraging benchmark data, retailers can enhance talent attraction and retention, ensuring an optimized investment in their salary budgets. Looking forward, a well-communicated and strategic approach to compensation will be crucial for sustained success in the competitive retail environment.