Reward market insights: trends from 2024 and predictions for 2025
As we transition into 2025, the reward landscape continues to evolve, shaped by economic trends, candidate expectations and employer strategies. Frazer Jones’ reward experts, Peter Francis and Leona McCarthy, reflect on the reward key trends from 2024 and provide insights into what 2025 may bring in the United Kingdom.
Salary trends: inflationary pressures and market adjustments
One of the most notable developments in recent years has been the steady increase in fixed pay across various reward roles. Post-COVID, the job market saw a surge in recruitment, driving salaries upwards.
For example, in 2020, the average salary for a Reward Analyst ranged between £40,000 and £45,000. By 2024, this figure had risen to £50,000–£55,000, reflecting an approximate 5% annual increase. While this upward trend has been seen across most levels, it has been particularly pronounced among manager and senior manager roles, with salaries frequently approaching six figures, especially within financial services.
Looking ahead to 2025, a key question remains: will salary inflation continue, or will it moderate in a lower-inflation environment?
With economic uncertainty easing and fewer external shocks expected, there is cautious optimism that salary growth will level out, following the sharp increases of recent years. Additionally, salary trends may vary across sectors such as retail, healthcare and financial services, depending on market conditions and talent demand.
Candidate expectations vs employer strategy
A significant shift has been the power dynamic between candidates and employers. At present, candidate-driven demand is shaping salary expectations, with top talent often being headhunted rather than applying directly for roles. Market research and data-driven decision-making have become essential for businesses looking to stay competitive in this evolving landscape.
This means organisations must remain agile, ensuring they have real-time market intelligence to attract and retain the best candidates. While salary remains a key factor in talent acquisition, businesses must also consider broader employee value propositions, including benefits, career development and workplace culture. Pay transparency, benchmarking and incentives are playing an increasingly significant role in how organisations position themselves in the talent market.
The evolution of employee benefits and wellbeing
Beyond fixed pay, employee benefits have become a central aspect of attraction and retention strategies. The pandemic accelerated investment in wellbeing programmes, with businesses introducing initiatives to support mental health, work-life balance and financial wellbeing.
Over the past year, benefits such as electric vehicle (EV) policies, enhanced flexible working arrangements and holistic wellbeing support have become more standardised across industries. However, as we move into 2025, the challenge will be differentiation – how can organisations innovate further to offer benefits that go beyond the industry norm? Advances in AI-powered automation and machine learning are transforming how businesses optimise loyalty programmes, customer engagement strategies and employee perks.
Job market cycles: a shift in career transitions
Another emerging trend is the shifting job cycle. Traditionally, professionals changed roles every two to three years, but we are now seeing a three- to four-year cycle. Many employees who were onboarded remotely in 2020 and 2021 are now actively looking for their next move.
This shift suggests a more stable employment landscape, with candidates prioritising long-term career progression and cultural alignment over short-term salary gains. Employers must therefore focus on internal career pathways to retain top talent in an increasingly competitive market. Organisations that leverage data-driven insights and market research to enhance their retention strategies will be better positioned for success.
Optimism for 2025: a year of stability and growth
Despite the economic and geopolitical challenges of recent years, there is growing confidence in the market. Following the volatility of 2020-2024, businesses and professionals alike are entering 2025 with a sense of stability and cautious optimism.
Confidence plays a crucial role in shaping market movements. If candidates and employers feel secure about the future, they are more likely to make proactive career and hiring decisions. This sentiment could support a stronger recruitment market, fostering a more dynamic and growth-oriented year ahead. Businesses that invest in great reward talent, new technologies, automation, customer data insights and optimisation strategies are likely to see greater success in both talent retention and overall performance.
How Frazer Jones can help your company find the right talent
As we navigate 2025, organisations must remain agile, informed and strategic in their approach to reward structures. While salary growth may moderate, the emphasis on benefits, wellbeing and career progression will continue to shape the job market.
At Frazer Jones, we are committed to staying ahead of these trends and providing insights that empower both employers and candidates. For more information on navigating the evolving reward landscape, get in touch with our team today.
