Get the feeling you’re underpaid?
Recently People Management asked us to provide commentary on a survey from Reed which found salaries in the HR industry have only risen by 1 per cent in the past year, compared with the national average increase of 5.3 per cent.
Our findings were published here
Nick Allwood delves a little deeper and gives his thoughts on an issue we are experiencing more and more in terms of employer and employee compensation expectations.
Measuring HR team’s output is difficult
HR pay will often lag behind other areas, with the function too frequently treated as an overhead rather than a value driver, sadly. When organisations are under pressure to control costs, pay budgets typically prioritise revenue generating roles first, and support functions like HR can see slower movement even as workloads increase. As we all know, it isn’t that the work’s not important, it’s that the impact is harder to see on a spreadsheet than a sales figure attributed to an individual or team for example.
This is one facet that helps explain Reed’s findings showing HR salary growth trailing the national average. In Reed’s summary, HR salaries rose by just 1% in 2025 versus a national average increase of 5.3%.
Unfortunately, the numbers don’t capture (or reward) how much HR’s scope has expanded. The function is carrying more operational risk, more employee relations complexity, more policy change, and more expectation around culture, engagement and capability, often with fewer hands on deck. We’re hearing “doing more with less” far too often. That can only create the disappointment a lot of HR professionals are feeling with their current salaries, when they are constantly asked for increased productivity whilst not being fairly compensated.
There’s also a structural issue. HR work is critical but not always valued until something goes wrong. You don’t tend to get credit for the grievances that didn’t escalate, the attrition you prevented, the leaders you coached into competence, or the restructures that landed without reputational damage and allowed the Organisation to meet their commercial forecasts. So, in many organisations, HR ends up in the ‘keep the wheels turning’ bracket, which naturally shapes reward decisions.
A distorted, two-tier HR labour market
What we’re certainly seeing at RedGreen Partners currently is a two-tier HR labour market that’s distorting salary expectations for both employers and employees.
On one side, there are candidates who, through no fault of their own, have found themselves out of work and are willing to drop their rate to secure a role quickly. That can naturally reduce advertised salary ranges and create a softer picture than the true market. It can also lead employers to anchor on the lowest available rate, rather than the rate required to attract the right capability and keep it.
At the same time, HR professionals in stable permanent positions are staying put. Low internal and external wage inflation means many do not see enough upside in taking the risk of moving roles, particularly if the new role comes with more scope, more complexity, and not significantly more reward.
Therefore, the entire talent pool is not visible to employers at all if they are restricting salary ranges. This combination can give hiring managers an inaccurate picture of what it really takes to attract and retain the high performing HR talent they seek.
This is where the disconnect becomes clear. Organisations say they want commercial, strategic HR, but are often pricing for steady state HR delivery. Nothing moves forward.
If the brief is transformation, capability building, workforce planning, and measurable improvements in retention and engagement, then the reward needs to reflect that level of impact. Otherwise, there’s a risk of hiring below the requirement or losing strong hires when a more attractive opportunity inevitably arrives for those coveted individuals.
Why some HR areas still command a premium
Another nuance is that even while overall HR salary growth can lag, certain specialist areas are still moving quickly because scarcity is real. HRIS and people analytics, reward, complex employee relations, and organisational change are areas where skills are harder to find and the cost of getting it wrong is high. That is why we are still seeing movement in these niches, even when broader HR salaries look more static.
Many businesses are turning to interim, short-term options for talent where the permanent solution is not available within the desired budget, or where capability is needed immediately. Areas such as ER, reward, HRIS, people analytics and change are all seeing this. It is not always the long-term solution, but it is often the most pragmatic way to deliver in the short-term. RedGreen Partner’s recruitment stats demonstrate so far in 2026, we’re being asked for short term cover in two thirds of the recruitment campaigns we’re asked to recruit by our partners.
What getting HR reward right actually looks like
To ensure HR feels properly rewarded, employers need to benchmark against role specific market data, not just the lowest available rates, and take a total reward approach. That includes:
Transparent pay bands and progression, with clarity on what progression looks like
Meaningful recognition tied to impact and outcomes
Flexibility and autonomy in how work is delivered
Investment in development, particularly in areas that increase commercial impact
Role design that aligns with expectations, so strategic roles have space to operate as such
Against a backdrop where UK median full-time earnings rose 5.3% year on year, getting HR reward right is increasingly important to retention. If HR teams continue to feel undervalued while workloads and expectations rise, the long-term impact will not just be morale. It will show up in capability gaps, slower delivery, and higher attrition at exactly the point businesses need strong, stable people functions.
A choice for employers
Employers are faced with a choice. Either continue to treat HR as a cost and accept the subsequent impact on performance, risk and culture. Or start rewarding it in line with the outcomes it is now expected to deliver. In today’s environment, HR is not just supporting the business, it’s actively shaping whether it succeeds or struggles.
To have a confidential chat with Nick Allwood, Director at RedGreen Partners, please email nick.allwood@redgreenpartners.co.uk or call 07968748577