UK Reward Management: Spring 2026 Survey Now Open

Hiring is still tricky

Around one third of organisations are still struggling to recruit. This has led to 44 per cent having to offer higher salaries to new hires than existing staff (mainly up to 10% more). That tension between attracting new talent and maintaining internal fairness hasn’t gone away.

Labour turnover is steady, not spiralling. Median turnover is 15.9 per cent overall and 11.6 per cent voluntary. Meanwhile, 61 per cent expect turnover to stay the same. So while movement is there, it’s not accelerating.

HR budgets: controlled, cautious and slightly contradictory

This is where things get especially interesting. The headline? Stability…with selective investment. Across most HR cost areas, the dominant response is simple: around 60 per cent expect no change in budgets. But that doesn’t mean nothing’s happening.

There’s a clear secondary trend; up to 29 per cent expect small increases on new initiatives (+1 per cent to +10 per cent), especially in:

• Reward management (26 per cent)
• Projects and new development (29 per cent)

Large increases are rare. Big cuts are also relatively limited. So overall, it’s a picture of tight control, with targeted spending where it matters most.

What HR teams actually want to focus on

When it comes to planned activity, a few clear priorities jump out.

High on the agenda:

• Employee opinion surveys (51 per cent, very likely)
• Pay benchmarking (38 per cent very likely, 34 per cent likely)
• Job evaluation and grading (strong spread across likely/very likely)

Getting attention:

• Reward strategy
• Benefits benchmarking
• Total reward statements

Lower priority (for now):

• Long-term incentive design
• Bonus design (surprisingly low given productivity pressures)

The common thread? A focus on understanding, benchmarking and refining, rather than radically reinventing.

And the biggest challenges? There are no easy wins – it’s a bit of everything.

If you scan through what organisations are saying in their own words, a few themes keep coming up:

• Pay pressure vs affordability: Balancing rising expectations (cost of living, market rates, minimum wage increases) with what organisations can actually afford.
• Pay transparency and fairness: This comes up again and again, especially with regulatory and cultural shifts pushing it higher up the agenda.
• Retention of key skills: Particularly in competitive or specialist areas.
• Budget constraints: Not surprising, but mentioned frequently; often alongside phrases like “doing more with less.”
• Systems and data challenges: HRIS limitations, data accuracy and the need for better integration.
• Change and transformation: From restructuring and mergers to new career frameworks and performance models.

And then there is the underlying tone running through a lot of responses: How do we keep people engaged and motivated when we can’t always give them what they want financially? That’s the real question many are wrestling with.