Innecto Pay Trends 2025 Survey: Key Findings
Innecto's Pay Trends 2025 Survey is our richest yet, looking in even more forensic detail at the critical connections between pay, skills and career pathways – themes central to shaping the future of work.
The dual goal of this year’s survey was to provide fresh insights to support our Pay Trends event, from which you can now download the Whitepaper, and to help our clients create meaningful employee experiences that drive positive organisational outcomes in attracting, retaining and engaging talent.
Our survey gathered responses from organisations across the UK and representing a broad spread of industries, sectors and sizes.
Pay Awards & Progression
We’re anticipating a decline in pay awards in 2025 and managing pay progression remains a significant hurdle for many organisations. Over half (57%) identified budget constraints as a key barrier, while a worrying 38% admitted they lack a clear policy or principles for managing pay progression.
On top of the rise in the National Living Wage (NLW), the upcoming 1.2% hike in National Insurance (NI) has introduced further uncertainty. Only 30% of companies plan to stick with their current approach, 33% are considering adjustments to pay budgets, and 37% remain undecided. This level of uncertainty highlights the pressure organisations face in balancing pay equity with budgetary constraints.
Career Progression
Career progression remains a missed opportunity for many organisations. Even though retaining talent is far cheaper and more productive than recruiting new hires, only a third of companies believe they provide clear, transparent growth opportunities. More than half cite undefined career paths and poor communication as key barriers in this area.
Most organisations understand what is needed for a strong progression framework. Encouragingly, two-thirds measure their success through employee feedback, while just over half (55%) track retention rates and 36% monitor promotion rates.
However, the challenges are plain to see: 45% lack a career framework; 36% admit they struggle to identify skills and competencies; 32% cannot effectively measure career progression; and 28% find it difficult to identify high-performing employees.
Surprisingly, half of organisations with over 1,000 employees have no career framework in place. While concerning, this gap represents a significant opportunity to boost retention and engagement at scale – especially when progression pathways are integrated with skills development and pay strategies. Addressing this gap is key to ensuring that pay progression is not just financially sustainable but also aligned with career growth opportunities.
On the Horizon
Progression is a clear priority but aligning it with long-term strategy remains challenging. Only one respondent confidently stated their skill development initiatives are fully aligned with their organisational strategy, while 75% rate themselves as moderately aligned or worse.
As we look ahead, three key challenges dominate the horizon:
- Technology - 70% cite AI, automation and digital transformation as their biggest workforce challenge
- Wellbeing - 64% highlight hybrid work models and employee wellbeing as critical areas of focus
- Sustainability - while 33% recognise ESG as a challenge, it’s seen as a secondary priority compared with immediate socio-economic pressures
While each challenge presents unique pressures, the interplay between technology, wellbeing and sustainability demands an integrated workforce strategy. To navigate these challenges, organisations should prioritise targeted skills development, flexible work models and transparent ESG goals. This strategic alignment is crucial not just for employee engagement, but also for driving long-term business performance – linking directly to the principles of the Service Profit Chain (developed by Harvard Business School professors Heskett, Sasser, and Schlesinger).
Employee Value Proposition (EVP)
A strong EVP defines an organisation’s unique set of benefits designed to attract, engage, and retain its employees. It reflects the alignment between what employees value and what the organisation delivers, encompassing pay, benefits, culture, career opportunities, and more.
Our survey revealed that over two-thirds of respondents believe their benefit offering is competitive, but only one third think they communicate their EVP effectively. This gap represents a clear opportunity: happy employees are not only more productive but three times more likely to recommend their organisation to others.
Importantly, EVP isn’t just about internal engagement – it’s a key driver of customer satisfaction and business success, as outlined in the Service Profit Chain. Over 80% of respondents are committed to investing in their EVP and improving their employee experience in the next two years, recognising its potential to influence broader organisational outcomes.
Innecto Reward specialises in creating pay policies and frameworks that connect employee progression, engagement, and success. If you feel you could benefit from help and advice aligning pay and progression with your long-term goals, or to discuss any of the topics covered in Pay Trends 2025, please contact Justine.Woolf@innecto.com
