As 2024 ticks over into 2025, we asked some of our expert consultants to share their thoughts on trends and areas they expect to be dealing with in 2025, in order to help clients address some key challenges.
Job Design - Justine Woolf, Director of Consulting Meet Justine >
I’m interested to see how organisations tackle job design to make work more flexible. It’s a key area that impacts the gender pay gap and requires organisations to be creative and willing to adjust from the status quo. We’ve seen how changes in some retailers have had positive impacts on retention and engagement. With more companies now considering a reduced work week, I think this is an area of HR that can have a significant impact over the next 12 months.
Mitigating Pay Compression - Sarah Lardner, Director of Business Innovation, Senior Principal Consultant Meet Sarah >
Co-hosting a recent REBA roundtable discussion at Mitie PLC, it became evident that there is a pressing need to address pay compression, especially with the additional challenges posed by the upcoming increase in the National Living Wage. Pay Compression isn’t a new problem for many of our clients, but it is a pressing one. Solutions we discussed revolved around reviewing current pay structures and job architecture, including an assessment of job levels and job content. That kind of structural audit and process could be crucial for many in 2025.
Pay Gap reporting 2.0? - Cathryn Edmondson, Lead Consultant Meet Cathryn >
I’m interested to see how far the government goes with changes to pay gap reporting. Many believe that Gender Pay Gap reporting hasn’t had the desired impact and therefore simply replicating the legislation for ethnicity and disability pay gap reporting will also not drive the change needed. They may decide to follow Europe’s lead and strengthen the legislation by reducing the headcount threshold, or by making action plans to address gaps as part of the legislation.
Many organisations don’t capture ethnicity and disability data, or at least don’t do it consistently. Companies need to increase their capacity to capture the right data, while also building trust with employees to encourage them to share that data, which may feel quite uncomfortable.
Progression vs Equity - Simon Cook, Senior Consultant Meet Simon >
I think there could be an interesting tension between rewarding workers and maintaining equity. On the one hand, employers want to reward or progress pay to recognise individuals based on performance, competence or skills acquisition. On the other hand, the focus on equity increases the amount of scrutiny put on those processes being robust and equitable. Working with smaller pay pots in 2025 it will be a big challenge to achieve both, without creating lots of additional work for HR and business leaders.
Finding ways to retain top performers - Holly Coe, Senior Reward Consultant Meet Holly >
Related to what Simon has pointed out above, with the increase to Employers’ NI, organisations are going to be thinking about how to neutralise the additional burden on the bottom line. This may mean reduced annual salary reviews across the board, which some of our insights are already pointing to. With this in mind, I’m looking forward to supporting organisations in retaining and engaging their existing workforce through other methods, such as benefits and recognition and using non-consolidated incentives to reward top performers.
Greater focus on Variable Pay - Spencer Hughes, Reward Consultant Meet Spencer >
Variable pay hasn’t been a primary focus in 2024, and I’m interested to see whether and how that could change in 2025. As referenced above, with base salaries experiencing compression, could variable pay be leveraged more to retain a distinction between levels of seniority? We will certainly be on hand to advise and help, if that is an option for our clients.
