How to decide salary ranges in 2025
Learn how to how to determine salary ranges that support your talent acquisition efforts with our latest research.
With 3 in 5 workers worried about their finances amidst high living costs, what employees and candidates want and expect from employers is changing. While benefits, work-life balance, and career growth are increasingly valued, salary remains a priority for 72% during a job hunt.
In this guide, we’ll explore the importance of salary ranges and how to structure them effectively within your compensation packages.
Interested in the trends shaping salary discussions in 2025?
What is a salary range?
Salary ranges are a structured spectrum of compensation an employer is prepared to offer for a specific role, establishing a minimum and maximum salary reflecting factors like responsibilities, required skills, market conditions, and organisational budget. As a result, salary ranges serve as transparent guidelines for employers and candidates while promoting fair and competitive pay practices.
For example, if you had openings for a cashier position and a deputy manager position at a supermarket, you might advertise the jobs with the following salary ranges:
- Cashier: £22,000 to £26,000
- Deputy manager: £32,000 to £40,000
These ranges account for varying levels of experience, education, and performance, enabling flexibility within a predefined framework. They also help set expectations during the recruitment process, ensuring alignment between an offer and the prospective employee’s expectations.
How salary ranges work
The point of having a salary range for a role is that not everybody has the same level of experience or expertise. Someone applying for the cashier role who has never had a full-time job before might expect to come in at the start of the range.
On the other hand, someone with a few years of experience will likely require less training and time to get up and running, and may even bring experience and knowledge that could make wider improvements to operations. They might expect to be offered a salary near the top of the range.
Salary ranges aren’t just for advertising jobs and attracting candidates. They can provide a current member of staff at the bottom of the pay range a clear progression path, where they can work their way up to the top before being considered for promotion. This gives employers a greater level of flexibility to meet individual employee needs while managing budgets.
The importance of salary ranges
Implementing salary ranges as opposed to fixed salaries can be advantageous to employers for several reasons. Let’s take a look at why salary ranges could be a valuable approach for your organisation:
- Transparency: Candidates often feel frustrated when they invest time in applying for a role or attending interviews, only to discover the salary falls below their expectations. By communicating a clear range, employers and recruiters can set clear expectations, ensuring candidates enter the process with a realistic understanding of potential pay.
- Fairness: Every candidate brings unique skills and experiences to the table. A salary range allows for flexibility, ensuring individuals are compensated fairly according to their qualifications and value they bring to the role.
- Consistency: Salary ranges help standardise remuneration across an organisation, maintaining equity and coherence, enabling employers to offer suitable compensation to candidates at different career stages without causing discrepancies in pay for similar roles.
- Attract talent: A well-defined and clear communicated salary range signals to potential hires that an employer values their expertise, with our research showing 85% of workers view employers who provide pay transparency more positively.
- Reduce turnover: Salary ranges allow room for professional development in a role, giving employees the opportunity to grow both professionally and financially. This potential for advancement helps foster satisfaction, engagement, and long-term retention.
How to determine a salary range
Creating a salary range is a strategic process that involves careful consideration of numerous factors, similar to the approach taken during a salary review. It’s important to ensure that the range reflects not only the role’s responsibilities but also market trends, organisational budget, and internal pay equity.
Below, we’ve outlined the steps you can follow to establish salary ranges across your workforce.
1. Start with accurate and detailed job descriptions
To know what salary to offer for a role, you really need to understand the role itself and what you’re expecting from it. That starts with creating accurate and detailed job descriptions. This will then inform the job advertisement, the expectations that are set upon hiring a candidate, and the salary they can expect to earn.
When you’re writing job descriptions, it’s important to think beyond the here and now. Consider what growth is expected within the role, especially if it’s an entry-level position, and the potential changes to responsibilities that may be involved.
2. Conduct market research and benchmarking
With employers competing to onboard top talent, it’s vital to stand out from the crowd with an enticing offer. As a result, it’s crucial to understand the current landscape and jobseeker expectations.
There are several resources you can use to conduct this research, including:
- Salary data sources such as Totaljobs’ Salary Checker.
- Industry reports and salary surveys. Many sectors will have annual reports detailing the average salaries on offer for certain roles and any trends that you need to be aware of to help you benchmark accurately.
- Government databases such as the Office for National Statistics, which offers a wealth of information.
Discover how to use salary benchmarking to attract, retain, and motivate talent with the help of our analysis of over 17 million job ads across 23 industries.
3. Assess your budget and financial capacity
It’s no good offering top employee salaries if it puts your organisation’s financial health at risk. While competitive pay is essential to attract and retain top talent, it must align with what you can realistically offer.
Determining a salary range, therefore, means being aligned with your organisation’s budget, balancing competitiveness with financial sustainability. This ensures that your compensation strategy supports broader organisational goals without overextending resources.
Collaboration with finance teams is crucial to get this right. Where possible, look ahead and forecast how salaries may need to be adjusted over the next year or two—whether due to inflation, changes in market rates, or other factors.
4. Develop clear salary ranges for each role
Once the research, benchmarking, and alignment with finance are complete, it’s time to set salary ranges.
This is the point where a minimum, midpoint, and maximum salary for each position needs to be established. These should be based on skills and experience, with expectations of candidates clearly defined for each part of the scale, so anyone involved in the hiring decision is up to speed.
Accounting for performance and contribution by setting criteria for moving within or to the top of the range should also be considered during this process.
5. Factor in total compensation
While a competitive salary is key to talent attraction, bonuses, benefits, and perks also have a key role to play. So, when defining salary ranges, look to factor in the full package on offer.
Employee benefits packages are an underrated tool in the recruitment package. 66% of UK workers say they would be willing to skip a higher salary offer to obtain their most desired benefit, with our research showing the most attractive benefits for candidates include:
- Flexible hours
- Sick pay above what’s required
- Pension contributions
- Hybrid and remote working options
- Learning, training, and skills development
Implementing incentives that resonate with employees and candidates can help reduce turnover and keep staff motivated, and is an increasing focus for employers, with PwC research showing 54% of organisations are looking to review their current non-financial benefits.
Employee benefits have become increasingly important for organisations looking to attract and retain talent. Discover how to create a benefits package that stands out in a competitive landscape with the help of our latest research.
6. Clearly communicate salary ranges to employees and candidates
Once salary ranges have been set and benefits defined, it’s important to be transparent with jobseekers and employees. This can either be done by publishing the information on the job advert or by clearly communicating with candidates during the recruitment process.
This transparency can help build trust with candidates while demonstrating to current and future employees you have carefully considered your salary ranges, and that you are open to addressing any questions they have.
Clear communication around salaries also has the added benefit of making it less likely candidates will seek out salary details on third-party sites where information may not always be accurate or up to date.
7. Monitor and update salary ranges regularly
Just like the wider economy, inflation, and candidate expectations, salaries are constantly in a state of flux, with workers expecting an average increase of 4.5% this year. As a result, failing to monitor and regularly update your salary ranges for open roles can result in your organisation failing behind competitors in the hunt for talent while facing an uphill battle during salary negotiations.
To ensure that salary ranges remain competitive and aid in talent acquisition efforts, consider conducting annual or bi-annual reviews. This can be achieved by following the steps above, playing close attention to research and benchmarking processes.
Access the insights you need to create attractive salary ranges