The future of pay: Holistic rewards redefining talent strategies

In brief

• The findings from the Future of Pay 2025 report make it clear that businesses must rethink traditional compensation strategies to attract and retain top talent.
• Organizations should prioritize data-driven compensation, holistic wellness, personalized benefits and flexible work models to enhance their Rewards Value Proposition (RVP) and ensure talent attraction and retention.

Employee wellness as a retention strategy

Employee wellness has taken center stage as organizations realize the link between workforce health and productivity. A remarkable 92% of survey respondents indicate employer support for mental health initiatives, including counseling, virtual therapy, and training. Digital wellness is emerging as a priority, with 62.5% of organizations focusing on tools like screen time management and ergonomic support.

Redefining workplace perks: Flexibility and comprehensive benefits

Flexibility has become a cornerstone of modern total reward strategies, with flexible work now outweighing salary as a primary driver of job satisfaction. Employers are responding by offering hybrid and remote work models, compressed workweeks, and flexible scheduling. While these arrangements improve employee retention, companies must also foster workplace engagement to maintain a sense of belonging.

Beyond flexibility, organizations are prioritizing personalized employee benefits to cater to diverse needs. 78% of employers are focusing on customized perks, such as financial planning, childcare support, and caregiving assistance.

Health benefits are expanding, with 87.5% of companies now covering OPD, dental, and vision care. Workplace financial wellness is also gaining traction, with 50% of organizations offering programs like student loan assistance and savings plans. Moreover, 6% of companies support green commuting initiatives and volunteer days for environmental causes.

Family support remains a key focus, with 90% of organizations providing parental leave for all caregivers, childcare assistance, and return-to-work programs. These evolving workplace strategies reflect a holistic approach to employee well-being, integrating flexibility and comprehensive benefits to enhance job satisfaction and organizational success.

Industry trends: Salary increments remain strong but moderating

While salary growth remains robust, the pace is slowing slightly. The report projects an average salary increase of 9.4% in 2025, a marginal dip from 9.6% in 2024. Despite this moderation, certain industries continue to see strong salary hikes. E-commerce is expected to lead with a 10.5% increase, followed by financial services at 10.3%. The report suggests that in competitive sectors, employers need to look beyond annual increments and focus on holistic total rewards strategies, including performance-based incentives, AI-driven salary benchmarking and non-monetary benefits, to attract and retain employees.