Average Salary Increase Trends 2025: What Employers and Employees Need to Know

Macro outlook: inflation, labor markets and expected average raises

Heading into 2025, macroeconomic conditions are the primary driver of average salary increase trends. Inflation has moderated in many countries compared with the peaks of recent years, and central bank policies are slowly shifting from emergency rate hikes to data-dependent adjustments. That means many employers are planning more measured base-pay increases — commonly in the low single digits for general staff — while using targeted pay adjustments for priority roles. Globally, organizations are expected to budget differently by region: mature markets that saw large catch-up raises may normalize to roughly 2–4% average increases, while tight labor markets and emerging economies could see higher average budgets. Importantly, headline averages hide variance: cost-of-living adjustments, mandatory minimum wage changes, and sector-specific pressures will push some employers to grant higher-than-average raises for retention and competitive hiring.

Industry and role disparities: who will see the biggest raises?

Not all workers will experience the same salary movement in 2025. The most pronounced increases are likely in roles tied to scarce technical skills (AI/ML engineering, cloud architecture, data science), frontline healthcare and certain trade jobs where retention remains a challenge. Technology and healthcare employers often use a mix of base pay increases, signing bonuses and equity to secure talent, lifting total compensation beyond the average base increase. Conversely, sectors with weaker demand or high automation risk may only offer minimal raises. Geographic and company-size differences matter too: startups with strong funding may pay aggressively through equity and bonuses, while large incumbents may emphasize structured, modest base increases supplemented by performance pay and benefits.

Strategies for employers and jobseekers: how to respond to 2025 salary trends

For employers: prioritize pay equity and data-driven benchmarking. Use market salary surveys to segment jobs into critical, important and standard buckets, and allocate larger increases or variable pay to roles crucial for strategy execution. Communicate total rewards clearly — base pay plus benefits, bonuses and learning opportunities — to improve retention without unsustainable across-the-board raises. For jobseekers and employees: focus on market-aligned negotiation. Document your impact, highlight scarce skills, and be prepared to discuss comparable market data. If a base-salary uplift is limited, consider negotiating performance bonuses, flexible work arrangements or professional development investments. Both sides benefit from transparency: regular market reviews and timely conversations reduce turnover risk and ensure compensation stays competitive amid evolving 2025 trends.