Understanding compensation trends for finance roles in 2025 supports business success. Changes in how employees work, governance and pay equity, the skills required for business growth, and the need to reward top performers impact compensation strategies.
Knowing what to expect from the 2025 job market, including labor costs, pay transparency, the minimum salary test, and using artificial intelligence (AI) in hiring and retention, helps keep financial compensation packages competitive. These factors strengthen talent attraction, retention, and the bottom line.
Focusing on these financial compensation trends helps you know what to expect in 2025:
Cost of Labor
The first three quarters of 2024 saw fluctuating market conditions with generally slower hiring and slight unemployment increases. As shown by the U.S. Bureau of Statistics (BLS), the national unemployment rate indicated slowing demand for labor, with recent unemployment rates being the highest in approximately 3 years. Labor market uncertainty and inflation should keep salary increase budgets high during the initial 2025 planning cycle.
Pay Equity
More state and local governments are expanding pay transparency requirements. The pressure on labor costs and compensation budget allocation creates challenges for employers needing to fix pay disparities uncovered during reviews.
Minimum Salary Test
New Fair Labor Standards Act (FLSA) regulations require employers to review the minimum salaries paid to exempt, salaried employees to ensure compliance with the U.S. Department of Labor’s (DOL) minimum salary test. This change impacts which employees qualify for exemptions from overtime pay requirements. Therefore, employers must reassess employee classifications and adjust salaries as needed or reclassify roles to comply with the Act.
Integration of Artificial Intelligence
Many employers and employees are concerned about how companies use AI. For instance, some companies use AI to source candidates, drive engagement, monitor employee well-being, and assist with performance reviews. Others use generative AI to support human resources functions such as creating compensation and talent solutions. However, many employers and employees have concerns about data privacy, integration with existing systems, and lack of a clear business case.
Variable Pay for Retention
Companies should focus on engaging and developing current employees if voluntary turnover slows. Allocating dollars to compensation strategies such as performance initiatives and promotions reduces reliance on sign-on and retention bonuses. Adjusting variable pay, including expanding eligibility, refining payout opportunities, and recalibrating performance metrics used to allocate variable compensation, is an effective talent management solution.
Gain Additional Compensation Insight
FiStaff can provide additional insight into setting competitive compensation ranges for finance roles. Find out more today.
