Have your say: UK Reward Management Survey 2025 – Early trends revealed

3. A growing emphasis on employee wellbeing and robust management systems

Over the last year, we have seen how employers are expanding the scope of paid and unpaid leave to include life events like bereavement, fertility treatment, and miscarriage to reflect a more compassionate, wellbeing-focused workplace culture. There is a growth in volunteering days and charitable leave, as organisations bring their values to life through employee experience.

Sickness absence appears to be improving slightly – as the median absence has dropped from 3.2 to 2.8 days—yet pressures remain. With a drive for increased productivity given commercial pressures on many organisations, this has to be carefully balanced with a concern for employee welfare, as employers manage a workforce still navigating post-Covid challenges and heightened stress levels.

The role of upskilling and AI is gaining increasing attention. As businesses digitise and streamline, AI is reshaping the future of work – and employees are noticing. According to recent findings by People Management, one in four workers fears AI could lead to job cuts, underlining the urgent need for reskilling and futureproofing. There's a lean towards modest increases in training and HR project spend – signalling a measured but proactive approach to workforce investment.

Our early survey data shows that three-quarters of HR teams are prioritising pay benchmarking and employee surveys this year, while nearly two-thirds are focused on benefits benchmarking and reward strategy. These priorities reflect a renewed commitment to data-driven people strategies in response to rapid workplace shifts.

As part of this, HR Information Systems (HRIS) are under scrutiny, with one in five reviewing their platforms in the past year, and a further 17 per cent planning changes in 2025, largely to improve automation, reporting and data accuracy.

4. Reduced pay awards and budgeting in focus

Communication around pay decisions is becoming even more critical, especially in an environment of constrained increases and growing expectations. Expected pay review budgets for 2025 show a steady reduction on previous years, in line with earlier forecasts, highlighting the delicate balance organisations must now strike between sustaining employee satisfaction and managing financial pressures. Employers are looking at how best to communicate pay decisions, with tools such as Total Reward Statements proving a useful approach to reinforcing the reward package.

April remains the most common month for reviews, followed by January. Most organisations plan across-the-board pay increases, while many favour a hybrid approach that includes individual adjustments – driven primarily by external market pressures, internal equity, and performance.

Out-of-cycle pay increases (excluding promotions) are expected to decline slightly, with fewer organisations planning to offer them and lower maximum increases reported. As EU pay transparency regulations loom and equity concerns grow, communication around pay decisions is becoming a priority. The perceived importance of this communication has risen notably by respondents over the last three years, who report a shift toward greater transparency in reward practices.