ARTICLE · 26 FEBRUARY 2025

Will Salary Increases Outpace Inflation In 2025?

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After several years of aggressive salary growth combined with talent shortages, effective leaders worldwide are recalibrating their approaches in response to a shifting economic landscape.

United KingdomEmployment and HR

Salary increase budgets are stabilizing but remain relatively high by historic standards.

John Bremen is a guest contributor for Forbes, writing on topics including work transformation, leadership strategy, compensation and benefits, and sustainable strategies that support productivity and business success.

After several years of aggressive salary growth combined with talent shortages, effective leaders worldwide are recalibrating their approaches in response to a shifting economic landscape.

What's happening with salary increases and talent shortages?

The December 2024 edition of WTW's Global Salary Budget Planning Report suggests that salary increase budgets are stabilizing, with 2025 planned increases projected to be on average 3.7%, compared with 3.8% in 2024. Salary increases remain at a relatively high rate by historic standards (the pre-pandemic norm was 3%) amid higher total labor expenses (which include salaries, bonuses, variable pay

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