Salaries expected to grow at a slightly slower pace in 2025

Recent reports indicate that salary growth is expected to decelerate slightly in 2025 compared to previous years. According to a survey by The Conference Board, employers plan to increase salary budgets by an average of 3.9% in 2025. This is a decrease from the 4.4% actual increases observed in 2023 but slightly higher than the 3.8% increases in 2024.

Similarly, Mercer’s survey reveals that employers are preparing for total salary increases of 3.7% in 2025. This suggests a continued upward pressure on wages and benefits as organizations strive to attract and retain talent in a competitive labor market.

Globally, salary increases are projected to average 4.5% in 2025, with inflation at 2.6%. These figures are lower than the 2024 projections of 5.4% salary growth and 3.1% inflation, indicating a slight slowdown in wage growth across various regions.

In the United Kingdom, recent data shows a cooling in pay growth. Starting salaries have increased at their slowest rate in four years, reflecting company concerns over rising employment costs and a weak economy.

These trends suggest that while salary growth is expected to continue in 2025, it will do so at a slightly slower pace compared to recent years.