HR salaries are stagnating, with pay growth lagging behind that of other industries, research has revealed.
Salaries in the HR industry rose by an average of one per cent in the past year, compared with the national average increase of 5.3 per cent, according to an analysis by Reed.
One-sixth (17 per cent) of HR professionals are unhappy with their salaries, with 67 per cent of respondents saying their pay has not increased in line with the cost of living.
Three quarters (77 per cent) within the profession reported that they were actively looking for or considering new job opportunities.
The data forms part of Reed’s annual salary guide for 2026, which analysed more than 18 million job adverts and surveyed 5,000 UK workers on their salaries and benefits.
A struggling sector
Alexia Catt, HR expert at Reed, said the sector had been struggling as a result of “economic uncertainty, reduced hiring and rising expectations”.
“As organisations cut costs amid inflation and slower growth, HR budgets and recruitment activity have declined, while HR teams are still carrying heavy workloads from layoffs, restructures and ongoing workforce challenges,” she explained.
Catt added that HR was managing increasing complexity around compliance, hybrid work, wellbeing and inclusion, often with fewer resources. “Rapid advances in automation and AI are also reshaping traditional HR roles, adding pressure to upskill quickly,” she said. “All of these different elements have made it a particularly challenging period for the sector.”
Some specialist roles within the HR sector were more well-reimbursed than others, with employee relations manager salaries increasing by 12 per cent in the past year, internal recruiter roles by 11.8 per cent and HR analyst by 9 per cent.
However, some have faced decreases, including chief operating officer (-8.6 per cent), learning development manager (-5.9 per cent) and project manager (-4.9 per cent).
HR teams are still carrying heavy workloads from layoffs, restructures and ongoing workforce challenges
Misaligned salaries
On average, HR professionals want a pay rise of £4,231 from their current employer. This rises to £13,250 on average when considering moving to a new role. However, benefits still matter, with a quarter (26 per cent) saying they would not give these up for higher pay.
Reed’s HR salary report stated that salaries in the sector saw a “significant inflation spike” around 2023, but that they have since levelled off or fallen. “We are seeing roles for experienced HR directors advertised at salaries that are misaligned with market rates, making it difficult to attract professionals with the required level of expertise,” the report stated.
It described the “mismatch” between what companies were offering and individuals were expecting as a “major point of friction”.
The report found that the Employment Rights Act changes could drive an increased demand for skilled professionals over the next couple of years. “Upcoming changes to employment law will have significant impact, and HR professionals will be essential in navigating these changes,” it stated.
An increasingly complex role
Steve Nicholls, managing director at career guidance firm Executive Connexions, said: “Many HR professionals feel caught in a difficult position where expectations around wellbeing, change management, restructuring and leadership support have increased significantly, but compensation has not always kept pace.”
He added that some HR leaders felt that their strategic value was underestimated compared with other functions, despite their important role in retention, culture and organisational stability.
“Employers that wish to retain strong HR talent need to look beyond salary alone and ensure HR has a genuine voice at leadership level, clear progression opportunities and visible recognition for the increasingly complex role the function now plays,” advised Nicholls.
Employers need to benchmark against role‑specific market data, not just the lowest available rates, and take a total reward approach
Seeing the value
Nick Allwood, director at HR recruitment agency RedGreen Partners, said the people function was often treated as “an overhead rather than a value driver”.
He added that there was currently a two-tiered HR labour market that was “distorting” salary expectations. “There are candidates that through no fault of their own have found themselves out of work and are willing to drop their rate to secure a role quickly, which can naturally reduce advertised salary ranges and create a ‘softer’ picture than the true market,” he explained.
At the same time, Allwood noted, HR professionals in stable, permanent positions are staying in their roles because stagnant wage growth in the market means there is little to gain from moving roles.
“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: transparent pay bands and progression, meaningful recognition, flexible working and investment in development,” he said.
Actionable insights
- Benchmark salaries properly: Use role-specific market data, not the lowest rate candidates will currently accept.
- Give HR a real voice at leadership level: Clear progression and genuine decision-making authority matter as much as pay.
- Fix misaligned salary bands: Experienced HR directors are being advertised below market rate, and it’s costing you candidates.
- Think beyond salary: Flexible working, transparent pay bands and development investment keep people from leaving.
