Key Points
Compensation strategies are evolving in 2025 in response to new economic constraints, talent expectations, and growing demands for pay transparency. Companies are seeking to balance attractiveness, employee engagement, and cost control by diversifying their compensation levers. Value-sharing schemes, skills development, CSR criteria, and performance-based compensation are playing an increasingly significant role in total compensation policies. Compensation transparency and pay equity are becoming strategic priorities to prepare for upcoming regulatory changes.
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1. NAO 2025: a strong downward trend
The averagesalary increase budget (general and individual) should reach 2.33% in 2025, compared with 3.48% in 2024, according to the Groupe Alpha Study. This significant decline reflects companies' caution in the face of economic uncertainty.
This trend is confirmed by LHH, which reports a median increase of 2.5%, while 43% of companies have not budgeted for an increase, preferring other levers (bonuses, benefits in kind, mobility packages, etc.).
Read the article: Back to school 2025: rethinking your compensation strategy for a decisive final quarter
2. Is PPV losing ground?
Whereas 30% of companies had included a Value-Sharing Bonus (VSP ) in their agreement by 2024, by 2025 only 19% will have done so. With a median amount of just €500, the scheme seems to be losing its appeal.
Companies need to reinvent value-sharing mechanisms: profit-sharing, incentives, stock options or more innovative variable compensation schemes.
Read the article: Profit sharing: how to turn it into a real lever for collective engagement
3. Upskilling and reskilling at the heart of HR 2025 challenges
With theacceleration of AI and automation, some skills are becoming obsolete, while others are emerging.
More and more companies are investing in training and development, and integrating these schemes into their remuneration policies in the form of individualized training budgets, access to certifications or incentives for skills upgrading.
Discover the white paper on remuneration transparency
Discover the benefits of a transparent approach to talent attraction and retention, and how it can positively transform your corporate culture.
4. Faced with the financial demands of talent, difficult trade-offs
Salary expectations remain high, but with the economy under pressure, companies are struggling to keep up.
As a result, they have to choose between salary increases, fringe benefits and flexibility, in order to continue to attract and retain talent without jeopardizing profitability. Performance-based compensation schemes and exceptional bonuses should therefore be reinforced or reinvented.
5. What is the right work-life balance in a context where teleworking is on the decline in many companies?
Restoring confidence and empowering employees are among the HR 2025 challenges that will enable us to maintain a level of flexibility that is appreciated by employees and adapted to a context where private life, family... unquestionably take precedence over work. Job satisfaction depends on a good life balance.
6. ESG premiums and societal impact: a new form of incentive
The integration of environmental, social and governance (ESG) criteria into compensation packages is gaining ground.
By 2025, some companies are making a proportion of their executive and managerial bonuses conditional on environmental (carbon emissions reduction, CSR impact) or social (inclusion, diversity, well-being at work) targets.
A lever that combines performance and social commitment, while meeting the expectations of new generations.
7. Pay transparency: a growing demand
Employees are increasingly demanding transparency on pay and development criteria.
Companies need to clarify their pay scales, explain discrepancies and structure pay progression paths.
In addition, European regulations are pushing towards greater payequity and transparency, with new reporting obligations that go beyond the gender gap.
Discover our white paper: eBook: Transparency in compensation
Conclusion: a pivotal year of transition and innovation :
As an expert and partner, MCR is at your disposal to support your HR projects.
The challenge: Strike the right balance between attractiveness, commitment and cost control.
MCR Rewards can help you develop and optimize your compensation strategy to attract, motivate and retain talent, while keeping costs under control. Our experts are available to advise you on best practices and solutions tailored to your business. Contact us today to discuss your needs!
Compensation strategy: aligning performance, fairness, and attractiveness
Compensation has become a matter for senior management. It must balance budgetary constraints, transparency requirements, and talent expectations.
Audit, structuring, management, and support... let's build a consistent and effective compensation strategy.
FAQ
How can we attract and retain talent without significantly raising salaries?
Organizations are developing total compensation packages that combine base pay, variable pay, profit-sharing, employee benefits, flexibility, and opportunities for professional development. The goal is to enhance the perceived value of the overall package.
What role do upskilling and reskilling play in compensation strategy?
Skills development is becoming a key factor in building recognition and attractiveness. More and more companies are investing in training and incorporating these initiatives into their compensation and retention strategies.
Why incorporate ESG criteria into compensation systems?
Environmental, social, and governance criteria help align behavior with the company’s commitments. They also help strengthen employee engagement and ensure the consistency of the CSR strategy.
Why is pay transparency becoming a top priority?
Candidates’ and employees’ expectations are rising, while regulatory requirements are becoming stricter. Companies must now be able to justify their compensation practices and demonstrate internal equity.
