2025 pay trends to watch
37% of organizations globally indicated that their salary adjustments for 2024 were lower than expected during their 2023 compensation planning. 43% of respondents reported that their salary budget increases were in line with their 2023 projections.
For those organizations that saw higher actual salary budgets in 2024 compared to their initial forecasts, the primary reasons cited were:
Looking ahead, organizations are projecting an average salary increase of 4.3% for 2025, which is slightly lower than the 4.4% actual increase seen in 2024.
Voluntary attrition rates vary by location, with the highest rates in Mexico (10%) and the lowest in United Arab Emirates (3%), highlighting the importance for client to consider location differences in employee retention strategies.
Location | Average voluntary attrition rate |
---|---|
China | 4% |
Mexico | 10% |
United Arab Emirates | 3% |
United Kingdom | 6% |
United States | 5% |
Inflationary pressure, concerns related to cost management and the anticipation of a recession or decline in business results are among the top factors influencing 2025 budget plans. 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.
Country | Actual bonus % of base salary | Target bonus % of base salary | LTI % of base salary |
---|---|---|---|
China | 39% | 50% | 0% |
Mexico | 62% | 58% | 65% |
United Kingdom | 114% | 100% | 158% |
United States | 129% | 125% | 575% |
Country | Actual bonus % of base salary | Target bonus % of base salary | LTI % of base salary |
---|---|---|---|
China | 35% | 35% | 25% |
Mexico | 32% | 39% | 25% |
United Kingdom | 75% | 75% | 120% |
United States | 76% | 80% | 249% |