Compensation Trends for 2025: New Data Readout and HR Advice

16 snips

Jan 7, 2025

Compensation drives employee engagement and retention, but recent trends reveal growing dissatisfaction linked to economic challenges. The discussion highlights the generational divide in salary negotiations, with Gen Z embracing transparency for better pay. Strategies for effective compensation communication and the importance of aligning leadership perceptions with employee realities are explored. The episode also dives into best practices for implementing surveys and strategic salary increases to cultivate a more satisfied and motivated workforce.

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INSIGHT

Compensation Dissatisfaction

Employee dissatisfaction with pay is rising, likely due to increased cost of living.
Compensation is consistently a top concern in employee sentiment surveys.

ADVICE

Salary Tools

Use salary tools like MIT’s Living Wage Calculator to help set salary ranges.
Research and understand various tools available.

INSIGHT

Gen Z Salary Gains

Gen Z has higher salary increase expectations and negotiates better than other generations.
This proactive approach contributes to their higher average salary increases.

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Compensation is the reason people turn up for work. A great company culture helps, and the value of the work itself can make a difference, but realistically, money is what keeps people coming in each day. Indeed, compensation is one of the key factors in employee wellbeing, performance, and retention. However, as revealed in BambooHR's Compensation Trends for 2025 report, things are looking somewhat bleak in this area across the United States.

In this episode, we chew over the report, talk about some of the key findings, and explain what’s going right and what’s going wrong for the employees surveyed. We discuss the data at length, talk about the divide between generations and genders, and explain how current economic conditions play into all this.

While many are pessimistic about work and compensation, fear not: there are still positives to draw on and many actionable steps that businesses can take to improve employee satisfaction and engagement.

Key moments:

How the uptick in dissatisfaction with pay from employees is linked to current economic conditions
The value of salary tools such as MIT’s Living Wage Calculator
Why transparent negotiation may be the reason Gen Z is seeing higher salary increases than other generations
The optimum time to send out employee surveys
Why total pay transparency is not always optimal
How to develop a compensation philosophy
Why leaders are seen as out-of-touch by their employees – and how leaders can prevent this
Using data to see whether pay has been mapped right and coaching leaders in trends

Key links:

Subscribe to HR Unplugged Series: https://www.bamboohr.com/resources/podcasts/hr-unplugged/
Join HR Heroes Slack Community: https://join.slack.com/t/hrheroesworkspace/shared_invite/zt-21ad3f1r8-dkWC2EdmyhxUAHw9cGLdQw
Bamboo HR Homepage: https://www.bamboohr.com/
Compensation Trends for 2025 Report: https://www.bamboohr.com/resources/data-at-work/data-stories/2025-compensation-trends#:~:text=Average%20Salary%20Increase%20YoY&text=6.2%25-,For%20the%20second%20year%20in%20a%20row%2C%202%20in%205,42%25%20decrease%20over%20two%20years.