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6 trends affecting compensation strategy in European retail organisations

Author

Lisa Grunditz,
Keith Coull and
Elin Sjödahl
August 1, 2025

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

Source: WTW 2024 Salary Budget Planning Report December edition + 2025 Salary Budget Planning Report July edition for the retail and distribution sector’s overall median salary increases (including zeroes).
Salary Movement Trends
Country 2024 Overall Retail and Distribution 2025 Overall Retail and Distribution
(Forecast)
Austria 4.5% 4.0% ▼
Belgium 4.0% 4.3%
Denmark 3.3% 3.5%
France 3.7% 3.4% ▼
Germany 3.8% 3.8%
Ireland 4.0% 3.9% ▼
Italy 3.5% 3.3% ▼
Netherlands 6.0% 4.0% ▼
Norway 3.5% 3.5%
Poland 7.0% 6.0% ▼
Portugal 3.8% 3.9%
Spain 3.8% 3.5% ▼
Sweden 3.5% 3.4% ▼
Switzerland 2.5% 2.5%
United Kingdom 4.0% 3.4% ▼

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

                             
Source: WTW 2024 Retail Compensation Surveys — Western Europe.
New Hire Pay — Premiums Reducing
CountryIntermediate (P2) Professional (P3) Specialist (P4)
Belgium -13% -11% -8% ▼
France -4% -8% 2% ▼
Germany -1% -2% 0% ▼
Ireland -1% 3% -1% ▼
Italy -8% -3%-12%  ▼
Netherlands -4% 3% -2% ▼
Spain -5% 1% 5% ▲
Sweden -5% -2% 4% ▼
Switzerland -7% -3% -3% ▼
United Kingdom -4% 2% -1% ▼

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

Source: WTW 2024 Retail Compensation Surveys — Western Europe.
Belgium France Germany
  1. Secretarial/Executive Administrative Assistance
  2. Finance Generalist
  3. Account/Relationship Management Generalist
  1. Direct Sales Generalist
  2. IT Architecture (Systems Design)
  3. Regulatory Affairs and Compliance
  1. IS and Cyber Security
  2. Business Systems Analysis
  3. Agile/Scrum Master Project/Program Management
Ireland Italy Netherlands
  1. IT Architecture (Systems Design)
  2. Account/Relationship Management Generalist
  3. Direct Sales Generalist
  1. Channel Sales Generalist
  2. Payroll
  3. Administrative Services Generalist
  1. Tax Generalist/Multidiscipline
  2. Direct Sales Generalist
  3. Information Technology Project Management
Poland Portugal Spain
  1. Back-End Development
  2. Channel Sales Generalist
  3. IT Development Generalist
  1. Systems Software Development
  2. Data Engineering
  3. Predictive Analytics/Business Intelligence
  1. Direct Sales Generalist
  2. System Software Development
  3. Application Development
Sweden Switzerland United Kingdom
  1. Product Management
  2. Technology/ Digital Product Owner
  3. Consumer Data, Insights and Research
  1. Account/Relationship Management Generalist
  2. Administrative Services Generalist
  3. Data Science and Business Intelligence Generalist
  1. Information and Cyber Security Strategy
  2. Back-end Development
  3. Engineering Project Management

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.

Authors

Photo of Lisa Grunditz

Lisa Grunditz

Senior Director, Rewards Data Intelligence, Work & Rewards

Keith Coull's photo

Keith Coull

Managing Director, Rewards Data Intelligence, Europe

headshot photo of the author

Elin Sjödahl

Associate Manager, Rewards Data Intelligence

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