WTW shares what could shape global pay trends

Find out how Asia-Pacific compares to other regions

WTW shares what could shape global pay trends

Insurance News

By Roxanne Libatique

A recent analysis from WTW has highlighted several emerging trends in pay practices, including a focus on transparency, personalised benefits, and sustainable rewards.

These shifts reflect broader efforts to balance cost management with workforce attraction and retention.

2025 salary budget outlook

Projected salary budget increases for 2025 are expected to be moderate compared to recent years. WTW’s latest “Salary Budget Planning Survey” attributed this to inflation concerns, cost pressures, and anticipated economic challenges.

  • North America: 3.7%
  • Asia-Pacific: 5.2%
  • Central & Eastern Europe: 6.0%
  • Latin America: 4.5%
  • Middle East & Africa: 5.4%
  • Western Europe: 3.6%

WTW said these adjustments reflect a shift from earlier years when tight labour markets drove more aggressive salary growth. Companies are recalibrating budgets to reflect actual spending trends observed in 2024 while remaining competitive in the labour market.

Evolving pay structures and strategies

Many organisations are revisiting their base salary structures to adapt to shifting workforce and economic conditions.

According to WTW’s “Pay Effectiveness & Design Survey,” businesses are increasingly updating compensation models in response to regulatory requirements, environmental, social, and governance (ESG) priorities, and changing employee expectations.

Pay transparency is gaining prominence as employers seek to address employee demand for greater clarity and fairness. Around two-thirds of global organisations are either sharing or planning to share salary ranges with job candidates, with US employers leading the way (86%).

In regions with stringent transparency laws, employers are more likely to standardise their communication practices.

Compensation as a retention and attraction tool

Compensation continues to be a key factor in attracting and retaining employees. WTW’s “Global Benefits Attitudes Survey” indicated that 56% of employees cite pay as the primary reason for choosing a job, while 43% rank it as the top factor in staying with their current employer.

Regional attrition rates further emphasised the need for customised retention strategies. North America has the highest voluntary attrition rate at 9.2%, while Central and Eastern Europe reports the lowest at 4.7%.

Other drivers of attraction and retention include job security, flexible work arrangements, and workplace environment.

In-demand skills and roles

Changing labour market dynamics are driving demand for specific skills and roles across regions. Sales and compliance management skills rank among the most sought-after globally. Regional highlights include the following:

  • North America: Customer service representatives, warehouse associates, and software engineers lead the list of in-demand roles.
  • Europe: Project managers and software engineers are highly sought after.
  • Asia-Pacific: The biopharma and life sciences sectors anticipate the largest workforce growth.

Integration of sustainability and technology in rewards

Organisations are increasingly incorporating sustainability and social responsibility into their rewards strategies. Incentives tied to eco-friendly practices and recognition for contributions to social causes are becoming more common.

At the same time, employers are leveraging technology and data analytics to create more tailored compensation and benefits packages that address employees’ financial, physical, and emotional well-being.

Trends driving pay communication

Effective communication about pay programs is gaining importance as organisations navigate regulatory requirements and heightened employee expectations.

WTW’s “Pay Transparency Survey” identified regulatory mandates as a leading factor, cited by 64% of respondents. Other drivers include company values, ESG priorities, and leadership confidence in compensation programs.

Many multinational companies are adopting a standardised approach to pay communication, allowing for local variations based on regional norms and regulations.

As organisations refine their approaches to pay and rewards, these strategies will play a central role in managing workforce priorities and navigating ongoing economic challenges.

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