How salary benchmarking can help with budget constraints following the 2025 Spring Statement
With the UK’s 2025 Spring Statement announcement, organisations are facing increased financial pressures due to significant changes in wage regulations. Chancellor Rachel Reeves has confirmed a 6.7% increase in the national living wage, with the rate for age 21 and over increasing to £12.21 an hour on 1 April 2025 – this is an annual pay rise of approximately £1,400 for three million workers. While this move aims to support low-paid workers, it also introduces additional financial strain on businesses already contending with budget constraints.
This is where salary benchmarking becomes an essential tool for organisations striving to manage costs effectively while remaining competitive in the talent market. Salary benchmarking enables businesses to make informed decisions about pay structures, ensuring they attract and retain top talent without overspending.
The benefits of salary benchmarking
Attract and retain top talent
Salary benchmarking provides insight into competitive market rates, helping organisations position their compensation packages to appeal to high-calibre candidates.
Ensure fair and equitable pay
Regular benchmarking helps identify and rectify internal pay disparities, promoting fairness and compliance with equal pay regulations.
Control labour costs
By understanding market compensation trends, organisations can set salaries that are competitive and give insight for future budget considerations.
Employee morale and engagement
Employees who recognise their compensation as fair and competitive are more likely to be engaged, reducing staff turnover and associated recruitment costs.
Stay informed on market trends
Benchmarking allows organisations to be aware of their competitive market and trends.
How Moore Kingston Smith HR Consultancy can help
At Moore Kingston Smith HR Consultancy, our reward team specialises in helping organisations navigate salary benchmarking, ensuring compliance with legislation while maintaining competitive and cost-effective pay structures.
Our personal approach to your needs:
- Tailored salary benchmarking reports specific to your industry and organisation size.
- Strategic advice on compensation planning to align with financial and talent retention goals.
- Compliance guidance to help you meet and maintain relevant legislation while maintaining fairness and transparency.
- Customised pay structure design that balances financial sustainability with employee satisfaction.
Get in touch
With the 2025 Spring Statement bringing new challenges, now is the time to ensure your pay structures are both competitive and financially sustainable. Let us help you make informed, strategic decisions that support both your workforce and your bottom line.
For expert advice on salary benchmarking and reward strategy, contact our reward team at Moore Kingston Smith HR Consultancy.
