Pay rises to remain ‘modest’ in 2025

Modest Salary Increases Expected in 2025

Employers are anticipated to take a cautious approach to salary increases in 2025, with pay rises projected to remain “modest” at 2-3%. This forecast comes from the latest Irish salary guide by recruitment firm Morgan McKinley.

Targeted hikes in a Tight Labor Market

Despite a competitive labor market and rising living costs,businesses are prioritizing targeted salary increases for in-demand roles rather than widespread pay adjustments. “the days of across-the-board salary increases appear to be over, as firms adopt a more calculated approach, offering raises where they are most needed to address skill shortages,” states the report.

Transparency and Career Progression

Instead of large-scale pay hikes,companies are turning to structured salary transparency and thorough career progression plans to attract and retain skilled professionals in key sectors such as technology,life sciences,and financial services.

adaptability Remains a Priority

The demand for flexible work arrangements continues to be strong, with 67% of employees valuing remote work options and 56% prioritizing flexible hours.

Negotiating Power for Specialized Roles

“While overall pay growth is modest, demand for skilled talent in technology, finance, compliance, life sciences, projects and change, and construction give professionals in these fields strong negotiating power,” says Trayc Keevans, Global FDI Director at Morgan McKinley. “Employers must take a strategic approach to pay and benefits to retain top talent.”

Despite 44% of companies increasing salaries in the past six months,businesses remain cautious about wage inflation. “despite 44% of companies increasing salaries in the past six months, businesses remain cautious about wage inflation,” Ms Keevans added.

Looking Ahead

The future of salary trends in 2025 appears to favor a targeted and strategic approach. By focusing on the needs of specific roles and fostering a culture of flexibility and transparency, employers can attract and retain top talent even in a dynamic economic surroundings.

How do experts recommend employees approach salary negotiations in 2025 given the projected modest salary increases?

Modest Salary Increases Expected in 2025: An interview with Martin Doyle

In an exclusive interview with Archyde News,Martin Doyle,Chief Economist at Morgan McKinley,shares insights into the upcoming salary trends and what they mean for both employers and employees.

Setting Expectations for 2025

Archyde: Martin, the latest Irish salary guide from Morgan McKinley projects modest salary increases of 2-3% in 2025. Can you tell us more about this forecast?

Martin Doyle: Certainly. Employers are anticipated to take a cautious approach to salary increases next year. While the labor market remains competitive, businesses are being strategic with their spending, which includes compensation packages.

Archyde: Isn’t this somewhat restrained given the current economic climate and employee expectations?

Martin Doyle: Indeed,it is. But it’s crucial to remember that companies are dealing with various challenges, such as rising living costs and economic uncertainty. They need to balance employee satisfaction with their own financial objectives.

Targeted Salary Adjustments in a Tight labor Market

Archyde: We’re seeing a shift towards targeted salary increases for in-demand roles rather than across-the-board raises. can you elaborate on this trend?

martin Doyle: Absolutely. The days of widespread pay adjustments are indeed over. Firms are now adopting a more calculated approach, offering raises where they’re most needed to address skill shortages. This is especially true in sectors like technology, life sciences, and financial services.

Clarity and Career Progression: The New Face of Compensation

Archyde: Companies are increasingly turning to salary transparency and career progression plans. How notable is this shift?

Martin Doyle: Very significant.In today’s job market, professionals value clarity and opportunities for advancement. By focusing on these aspects, companies can attract and retain top talent, even in a dynamic economic landscape.

Adaptability: The New Normal

Archyde: The demand for flexible work arrangements continues to be strong. What does this tell us about the modern workforce?

Martin Doyle: It tells us that the modern workforce values work-life balance and flexibility. The pandemic has accelerated this trend, and employers must adapt to meet these expectations. It’s no longer a perk, but a necessity for many employees.

Negotiating Power: Specialized Roles in High Demand

Archyde: Your report highlights that professionals in high-demand roles have strong negotiating power.can you provide some insights into these roles?

Martin Doyle: Certainly. We’re seeing high demand for skilled talent in technology, finance, compliance, life sciences, projects and change, and construction.These professionals have a clear advantage in salary negotiations.

Archyde: One final thought-provoking question, Martin. What advice would you give to employees looking to secure a raise in this modest salary increase habitat?

Martin Doyle: I’d advise focusing on the value you bring to your role and your company. Clearly communicate your achievements and the impact you’ve made.Ultimately, employers value results and a strong track record.

Thank you, Martin Doyle, for sharing your insights with Archyde News. Stay tuned for more updates on the latest employment trends!