2025 pay trends to watch
Employee pay isn’t only important to employees. Organizations also rely on compensation programs to support many objectives.
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.
| Region | Planned increase |
|---|---|
| North America | 4.2% |
| Asia Pacific | 5.5% |
| Latin America | 5.9% |
| Western Europe | 4.1% |
Industry disciplines and functions seeing the fastest and slowest compensation growth
Changing labor market and economic conditions as well as socio-economic trends have increased the pressure on organizations to update their pay programs, according to the results of our 2024 Pay Effectiveness & Design Survey’s global results.
Across all regions, compliance and strategic roles are experiencing the fastest growth in compensation, reflecting the increasing importance of regulatory adherence and strategic planning in the fintech sector. Conversely, operational and support roles are seeing slower growth, indicating a potential shift in focus toward higher-level strategic initiatives and regulatory compliance. This suggests that organizations are prioritizing roles that directly contribute to navigating complex regulatory environments and driving long-term strategic goals. Understanding these trends can help compensation professionals tailor their strategies to attract and retain top talent in these critical areas.
Most respondents to the global Pay Effectiveness & Design Survey indicated that they have already made changes or are planning or considering making changes to their base salary structure design through fundamental shifts. These changes we see across all industries reflect a strategic response to the evolving demands of the fintech industry, emphasizing the need to attract and retain top talent in areas that can see a fast pace of change in a short period of time.
Multiple factors are encouraging increased levels of pay program communication within organizations. In the fintech industry compensation communication is increasingly characterized by transparency and flexibility. Unlike more traditional industries such as financial services or insurance, fintech organizations are more willing to share how they design their pay programs.
| Pay program communication drivers | Percent |
|---|---|
| Increasing regulatory requirements | 64% |
| Company values and culture | 51% |
| Environmental, social and governance / diversity, equity and inclusion agenda | 51% |
| Employee expectations | 46% |
| HR’s confidence in pay programs | 42% |
| Leadership’s confidence in pay programs | 38% |
Employee attraction and retention is one of six core objectives for pay programs in organizations around the world, especially as employees are most likely to say pay is a driver of attraction and retention, according to WTW’s 2024 Global Benefits Attitudes Survey.
| Driver | Percent | |
|---|---|---|
| Attraction | Pay (including bonus) | 56% |
| Job security | 34% | |
| Flexible work arrangements (e.g., working remotely, flexible work hours) | 32% | |
| Retention | Pay (including bonus) | 43% |
| Job security | 39% | |
| Working environment (e.g., location, facilities) | 32% |
The higher attrition rates in the financial services (FS) industry compared to the tech, media and gaming (TMG) industry can be attributed to several factors, including regulatory pressures, high stress levels and demanding workloads, which contribute to employee burnout. Additionally, the TMG industry offers more attractive opportunities for innovation, flexibility and career growth, drawing talent away from FS. These factors highlight the competitive challenges FS organizations face in retaining their workforce.
| Region | Financial services voluntary attrition rate | Tech, media & gaming voluntary attrition rate |
|---|---|---|
| North America | 9.0% | 8.0% |
| Asia Pacific | 10.7% | 9.0% |
| Central & Eastern Europe | 8.7% | 7.2% |
| Latin America | 10.2% | 7.0% |
| Middle East & Africa | 10.5% | 7.0% |
| Western Europe | 7.8% | 6.3% |
41% of organizations report labor shortages in multiple talent segments.
The fintech industry is experiencing a strong demand for technology and data roles. Positions such as software developer, data scientist and DevOps engineer are critical as organizations leverage advanced technology and data analytics to drive innovation. Additionally, roles like machine learning engineer and data engineer are essential, highlighting the industry's reliance on sophisticated data-driven solutions.
Compliance and risk management roles are also gaining importance. Know Your Customer (KYC) / Anit-Money Laundering (AML) analysts and regulatory affairs specialists are crucial for navigating the complex regulatory landscape and ensuring compliance. These positions are vital for maintaining trust and integrity in financial operations. Other key roles include financial analyst and risk specialist, which help organizations manage financial performance and effectively mitigate risks.
Skills in project management, compliance management and documentation & records management are highly sought after. They ensure project success and adherence to regulatory requirements, which are fundamental for operational excellence in the fintech sector. Additionally, data analysis and database management are critical for leveraging data-driven insights. Continuous improvement, automation and innovation management are also essential to stay competitive in the rapidly evolving market.
| In-demand jobs | In-demand skills |
|---|---|
| 1. Software developer 2. Product manager 3. Application developer 4. Data scientist 5. DevOps engineer |
1. Technical reporting 2. Software testing 3. Compliance management 4. Software development 5. Programming / scripting |
Two-thirds of organizations around the world are already or are planning/considering communicating pay rate or pay range information to job candidates, according to our 2024 Pay Transparency Survey’s global results.
77%
of organizations are more likely to communicate the hiring
rate / range for the job to external job candidates.
56% of organizations apply a consistent approach for all job levels and types to external job candidates
Organizations with operations in locations with increased legislation tend to apply a more consistent approach across the entire enterprise when sharing pay rates and ranges with prospective employees.
Locations sharing pay rates and ranges with prospective employees
01
AI will continue to have a significant impact across organizations, and more specifically in the HR function. HR processes like recruitment, performance management and employee engagement will be enhanced by AI tools that will continue to enable fintech organizations to efficiently identify and develop top talent, ensuring they stay competitive in a rapidly evolving industry.
02
Fintech organizations have been at the forefront of pay transparency and we expect them to continue to lead in this space. Fintech organizations adopting a more transparent approach will build better trust and attract higher-quality candidates, setting a benchmark for other sectors.
03
With the increasing complexity of regulatory environments, fintech organizations are placing a greater emphasis on compliance and regulatory roles. This trend highlights the importance of these roles, driving up compensation, reflecting their critical role in navigating regulatory challenges.
