Reward professionals are no longer just balancing budgets and aligning salary bands; they are operating in an environment of unprecedented transparency, rapid technological advancement, and shifting employee expectations.
Here are the key takeaways from the board’s discussion on the practical challenges facing Reward teams today, and how businesses are attempting to navigate them.
Reward data under greater scrutiny
A central theme of the discussion was the growing challenge around confidence in benchmarking data. Reward professionals have always accepted that data isn’t perfect, but the volume and intensity of challenges from unions, business leaders, and employees have reached a critical level.
Today, business leaders and hiring managers routinely bring their own data to the table. Often sourced from recruiters or speculative AI searches, this data is used to argue for higher rates. Consequently, Reward teams spend significant time defending established, robust methodologies against unverified or anecdotal figures.
This erosion of trust in "expert" data is driven by anecdotes and a tendency for employees to look "over the fence" at rates offered by competitors. When a manager hears a rumour about a rival firm’s pay structure, standard benchmarking data is frequently dismissed, creating friction across the organisation.
The "Moon on a stick" mentality
Social media and pay transparency legislation have fundamentally altered employee expectations. Workers are now highly informed about negotiation tactics and the specifics of competitor industry packages. This has led to what several board members described as a "moon on a stick" mentality, the moment HR resolves one reward issue, it immediately triggers the next demand.
The traditional offering of a competitive salary and a comfortable office environment is no longer enough to secure loyalty. Instead, there is a growing demand for personalised pay and benefits. This shifts the pressure onto HR to move away from blanket policies and toward individualised conversations, particularly for critical talent.
However, this individualised approach creates a new tension. To make it work, managers need to have mature, commercial conversations with their teams about financial realities. In practice, there remains a reluctance among some people managers to hold the line on tough reward decisions, leaving HR to bear the brunt of the dissatisfaction.
AI and the pace of change
The rapid rise of artificial intelligence has added another layer of complexity. Traditional benchmarking is coming under particular pressure in fast-moving, AI-facing technical roles, such as Machine Learning and Data Engineering. The skills required for these positions are evolving much faster than traditional, annual data cycles can capture.
Relying solely on annual updates to determine market rates for some areas of tech talent is becoming increasingly difficult. This lag creates a reactive, self-feeding cycle: because the data is slow, businesses make ad-hoc pay decisions to secure talent, which further distorts the market before the official data can record it. Reward teams are left chasing a moving target.
Regional friction and internal equity
The final major challenge discussed by the board involves the friction surrounding internal equity and global mobility. Moving talent between different markets has become increasingly difficult due to variances in pension contributions, inflation uplifts, and local tax structures. To combat this, businesses are increasingly forced to lean into "non-money" drawcards, focusing heavily on project interest, autonomy, and long-term career growth rather than trying to match financial perks like-for-like.
Domestically, internal equity is facing a different kind of pressure from "early careers" talent. Entry-level roles in highly-sought-after specialisms are demanding starting rates that risk outstripping the salaries of established staff. This creates an ongoing battle between HR’s commitment to internal equity and the broader business’s focus on immediate budget constraints and competitive talent acquisition.
Looking Ahead
The Board discussion pointed to a clear shift, in that established approaches to corporate reward are under increasing pressure. Relying solely on annual market surveys and rigid salary bands is becoming harder in a world where data is challenged more openly, skills are changing quickly, and employees expect personalised reward conversations.
The challenge is no longer just having the right data; it is helping managers and employees understand why reward decisions are being made. Its also aiding leaders to advocate reward policy and hold the line when faced with difficult challenges and decisions.
Annual surveys, salary ranges and structured reward approaches still have an important role to play. But in a more transparent and fast-moving environment, they need to be supported by clearer communication, stronger manager capability and more agile ways of assessing fast-moving roles.
To respond well in this transparent world, businesses need to equip their managers to have honest commercial conversations, find flexible ways to assess emerging and technical roles, and continue to show the wider value of work itself, rather than relying on the pay packet alone.
The third Innecto Advisory Board session took place on 30 April 2026, hosted virtually.
