by Suzanne Feeney, Country Manager at Robert Walters Ireland
With Q4 of 2025 underway and 2026 fast approaching, leaders are thinking about how to best use their new budgets – whether that’s going to include an increase in hiring or dishing out pay increases, one theme remains clear: do more with less. Leaders are being tasked with stretching their budgets even further than before and this presents a real challenge to ensure compensation packages are not only aligned with business objectives, but also with a highly competitive market.
With 85% of organisations planning to invest in upskilling to save on hiring costs, the question looms: how do organisations hire new people while meeting tight budgets? The answer: data-driven compensation planning.
Organisations are turning to hiring intelligence data and talent market insights to ensure their compensations packages are not only competitive, but equitable across their business. With the rise in pay transparency across the globe, employees are more invested than ever to ensure their compensation is reflective of their skills and experience.
What is compensation planning?
Compensation planning is a process that involves designing and managing how you pay employees. It includes planning related to base salary, commission structures, incentives, and other benefits covered by the organisation. According to Indeed, a compensation plan is “a package that encompasses employees’ wages, salaries, benefits, and terms of payment”. Traditionally, compensation relied heavily on estimates or rigid pay bands that didn’t reflect market rates.
Now, companies consider current market rates with an increased focus on fair pay across job roles, sectors, and even locations.
How talent needs impact compensation planning
In July 2025, McKinsey & Company published their HR Monitor 2025 report, stating that the number one trend that HR leaders in Europe must act on is to ensure workforce planning is more strategic. Strategic workforce planning includes talent forecasting, such as understanding the future talent and skills your organisation will need. This should not happen in isolation of talent costs. Understanding what talent you’ll need is only half of the equation. The other half is understanding what that talent will cost and whether your organisation can afford it.
Ignoring potential costs leads to unrealistic plans and budget overruns. As new skills emerge and the workplace continues to evolve, so do salary and compensation benchmarks. With heightened access to information about pay, employees and candidates are empowered with more information to confidently approach salary discussions. A lack of insight into the current and future market will make your hiring and retention fall flat, which will only drive up your hiring costs in the long run.
How compensation planning can save your budget
Compensation planning isn’t just about setting salaries. It’s a strategic lever for managing costs and driving value. When done well, it helps organisations avoid overpaying for roles, reduce turnover, and align rewards with performance. By benchmarking salaries against market data, organisations can offer competitive packages without inflating payroll.
Additionally, it helps leaders identify roles where internal mobility or upskilling may be more cost-effective than external hiring. In the current economic climate where tight budgets are a common theme for organisations across the globe, thoughtful compensation planning ensures that talent investments are intentional, equitable, and market related.
By empowering compensation planning with market data, leaders can make more confident decisions about how they pay their employees.
How to create a compensation plan
1. Conduct compensation benchmarking
Regularly compare your salary and benefits structures with industry standards to ensure you’re not overpaying. This could also include understanding what your talent competitors are offering to ensure you don’t risk losing talent to competitors who offer better benefits.
Usually, this involves using aggregate data from third parties which may not provide an accurate benchmark for your industry or the roles within your company. Our compensation benchmarking service helps you ensure your pay and benefits are designed to attract top talent and retain your best people. Combining market data with industry expertise and a deep knowledge of recruitment market trends, we deliver tailored insights that ensure our client’s compensation packages are market-leading.
2. Align your compensation planning with business strategy
Compensation planning should never happen in a vacuum. It must be aligned with your organisation’s strategic goals.
For example, if innovation is a key driver, you may want to offer competitive packages to attract top tech or product talent. If retention is critical, especially in client-facing roles, consider performance-based incentives or long-term rewards that encourage loyalty. During periods of cost containment, compensation strategies might shift toward non-monetary benefits like flexible work, career development, or recognition programmes.
3. Forecast future talent needs
Effective compensation planning requires more than reacting to current hiring needs; it demands looking ahead. Organisations must anticipate the roles, skills, and capabilities they’ll need and understand what those will cost in a shifting talent market.
For example, if your organisation is planning a digital transformation, you’ll likely need more data analysts, AI specialists, or cybersecurity experts – roles that are rising in demand and cost.
Once future roles are identified, the next step is cost forecasting. This involves tracking salary trends, inflation, and regional pay variations to estimate what it will take to attract and retain that talent. Without this insight, organisations risk under-budgeting or overpaying. These insights can be accessed through detailed talent and market mapping, which can help employers hire more effectively.
Why does your compensation plan need regular reviews?
Like any other business strategy, there’s always room to optimise as your organisation grows. To assess your own process, you’d need to consider key metrics such as budget adherence or how closely you remained committed to your organisation’s compensation philosophy.
For example, reviewing compensation plans will allow you to understand where money needs to be invested or reallocated, how to adjust compensation plans during seasons with tighter budgets, or how to better reward employees when the organisation flourishes.
By regularly reviewing it through the lens of strategic talent planning, you’re not just keeping up with the market, you’re future proofing your organisation in a business landscape that’s frequently changing.
Whether you’re scaling, innovating, or navigating change, a well-tuned compensation strategy helps you attract the right people, motivate them effectively, and retain them for the long haul. By regularly reviewing how you reward performance and plan for future talent needs, you ensure your organisation stays agile, competitive, and aligned with what truly drives success.
About the author
Suzanne Feeney is country manager of Robert Walters Ireland, Established in 1985, Robert Walters plc is a world-leading specialist professional recruitment consultancy and the core brand of the Robert Walters Group.
