In an exclusive conversation with SightsIn Plus, the discussion focused on the trends in compensation and benefits for 2025.
This report highlights the key insights from that conversation.
Compensation & Benefits Trends 2025
When considering the industry context for 2025 and beyond, particularly within the financial services sector and Global Capability Centers (GCCs) in India, several key trends emerge.
The geopolitical situation has significantly intensified talent demand and needs in India.
With the GCCs becoming sources of innovation and competitive advantage, the talent demand has escalated, directly impacting pay levels and practices.
Consequently, double-digit merit increases and generous bonuses are expected to remain prevalent in this sector for the foreseeable future.
However, these financial incentives will become basic hygiene factors, necessitating a broader employee value proposition that includes well-being, work environment, and growth opportunities.
The emphasis will be on creating an action-packed yet exciting environment for HR professionals.
Professionals will need to shift from transactional to experiential rewards, incorporating well-being, development opportunities, and work-life balance into their strategies.
As compensation budgets face limitations, organizations must offer benefits beyond financial incentives.
With the rise of remote and hybrid working models, maintaining a healthy work-life balance will be crucial.
This involves creating mechanisms and incentives for managers to support work-life balance.
Additionally, focusing on personalization in the Total Rewards strategy will be essential, catering to the diverse needs of employees at different career stages.
Recognition and continuous feedback will also play a vital role in fostering a sense of belonging and maintaining productivity in a hybrid working environment.
GenAI in Compensation & Benefits Role
Generative AI holds significant promise in transforming the compensation and benefits landscape, yet its full potential remains to be realized.
In the financial services industry, numerous use cases are under assessment, with real impact anticipated in a few years.
Current applications show promise in software development, where AI aids in coding, and talent acquisition, where it enhances volume hiring and turnaround time.
Emerging technologies, including generative AI, are expected to revolutionize compensation and benefits design.
Future advancements may replace SaaS platforms with more integrated AI solutions, enhancing decision-making through predictive analytics.
These tools can identify employees at risk of leaving due to dissatisfaction, helping reduce attrition and boost engagement.
Additionally, organizations are exploring AI to optimize limited budgets, retain top talent, and ensure competitiveness in salary bands.
The focus is on holistic approaches that balance financial and non-financial rewards, ensuring sustained productivity and satisfaction.
Employee Benefits’ Initiatives 2025
The shift towards modular and customizable employee benefits is essential, especially with the rise of gig workers.
Companies must design benefits tailored to diverse needs, including well-being, mental health support, and work-life balance.
Strategies such as personalized career development paths and financial planning assistance are becoming crucial.
Additionally, initiatives like community contributions and on-site childcare facilities are gaining traction, enhancing employee retention and satisfaction.
The trend towards performance-based, skill-based, and location-based pay adjustments is also prominent, reflecting the evolving demands of a hybrid and remote working environment.
These approaches are set to redefine compensation and benefits in the coming years.
Salary Trends 2025
According to a study by WTW, the average salary increment in 2025 is predicted to be around 9.5%.
The Global Capability Centers (GCCs) are experiencing significant growth and hiring, contributing to this trend.
Additionally, the manufacturing sector is seeing increased talent demand, fueled by government incentives and internship schemes.
This sector is also expected to witness substantial salary hikes as a result of these efforts.
The combined focus on GCCs and manufacturing indicates robust salary growth across these industries in the coming year.
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