A microscope on total rewards: Trends for 2025

Kate Bravery

Global Advisory Solutions & Insights Leader, Mercer
Gordon Frost

Global Rewards Solution Leader

The New Shape of Work interview series addresses the challenges and uncertainty in the current business environment with a focus on how to transition to a more agile workforce for the future.

In this podcast episode, Kate Bravery and Gordon Frost discuss the evolving landscape of total rewards in the workplace, emphasizing the increasing challenges HR professionals face as they navigate pay transparency, economic uncertainty, and the integration of AI in total rewards strategies. They highlight the importance of addressing pay gaps, aligning compensation with organizational philosophy, and preparing for upcoming legislative changes. The conversation underscores the need for HR leaders to leverage data effectively, enhance their understanding of skills-based compensation, and foster transparent communication with employees regarding pay practices.

Interesting moments:

A year of action

2025 needs to be the year where people get their house in order and clean up the pay inefficiencies or pay gaps. Companies won't have a lot of time after that to be ready for the EU Pay Directive, and other pay transparency laws around the world.
Fix the foundation

Rewards professionals are realizing they need to do more work around their data integrity and the robustness of their data before they can even think about what kind of AI models or AI tools they might benefit from.
Skills and compensation

More people are looking to bring skills into the comp agenda. They want to identify the skills that are most likely to align to their jobs from a market perspective. With clean data, AI can do that a lot more quickly.
M&A integration

Coming out of an M&A deal, you may have two organizations with different pay philosophies. You may inherit a set of jobs or a pay structure or pay philosophy very different from the one that you have. The integration of those is critical.