Strategic HR

Leading org-wide impact: Lessons for 2026 from SHRPA Total Rewards Report

|24 December 2025

Insights from SHRPA Total Rewards Report 2025 that will be critical for HR and TR leaders in building the next generation of total rewards strategy

The role of Total Rewards in APAC is undergoing a fundamental reset. Once viewed primarily as an engine for cost control and operational efficiency, Total Rewards is now being called upon to deliver leadership strength, talent excellence, and workforce resilience in an era of borderless growth, AI acceleration, and rising people costs. Insights from the SHRPA 2025 Global Total Rewards Report reveal that this transition is not optional. It is fast becoming a business imperative .

Across APAC markets such as India, Southeast Asia, and Pacific-ANZ, organisations are navigating a complex convergence of forces: rapid digitalisation, increasing access to foreign capital and global talent, uneven AI adoption, and intensifying productivity pressures. These shifts are redefining what value means for employees and what outcomes Total Rewards must drive for businesses.

A Disrupting Business Landscape Raises the Stakes for Rewards

The research highlights that talent shifts remain among the top three business concerns, but what stands out is the sharp rise in the importance of foreign capital and cross-border talent access—jumping five points year-on-year .

For APAC organisations, this means competing not just locally, but against global employers for scarce digital, AI, and leadership capabilities. This “borderless growth” is pushing up the cost of talent and growth, while simultaneously exposing gaps in leadership readiness, workforce productivity, and organisational agility. Business and HR leaders cite challenges such as managing multigenerational workforces, redefining roles disrupted by technology, maintaining high performance cultures, and building resilience at scale.

In this context, Total Rewards can no longer remain a downstream HR function. Its influence on business outcomes increasingly depends on how effectively it supports leadership development, talent excellence, and total workforce planning—areas where many organisations continue to face execution bottlenecks.

The Expanding Mandate of Total Rewards

The SHRPA research signals a clear shift in how Total Rewards is expected to create value. Its remit is expanding beyond compensation and benefits to encompass careers, wellbeing, culture, leadership development, and workforce governance—enabled by technology and analytics . For APAC employers, this expansion reflects structural realities.

Younger workforces in India and Southeast Asia demand faster progression, skill recognition, and purpose-driven value propositions. A one-size-fits-all rewards model is no longer viable. Yet, despite this broader mandate, Total Rewards effectiveness continues to lag across key HR challenge areas, particularly leadership development and talent excellence. The research finds that 38% of Total Rewards leaders need to overcome gaps in these areas to create meaningful business impact

The AI Readiness Paradox in Total Rewards

Perhaps the most striking insight from the research is the AI readiness paradox. While 70% of Total Rewards leaders aim to leverage AI to transform rewards strategy and decision-making, only 24% are fully ready to do so.

Lack of internal capabilities emerges as the primary barrier. Many rewards teams lack the analytical skills, data integration maturity, and governance frameworks needed to embed AI across benchmarking, pay design, performance differentiation, and workforce planning. As a result, AI risks being treated as an add-on rather than a foundational capability.

For APAC organisations, this gap has significant implications. Without AI-driven insights, Total Rewards struggles to keep pace with fast-evolving skills markets, rising pay volatility, and the need for fair, transparent, and personalised reward experiences. More critically, limited AI adoption reduces HR’s influence in strategic decision-making, reinforcing perceptions of HR as reactive rather than enterprise-critical.

Emerging Gaps Strategic Consequences

The SHRPA Total Rewards Report identifies three interlinked gaps shaping the future of Total Rewards:

AI Readiness Gap – Limited ability to assess, adopt, and integrate AI across rewards processes.
Value Realisation Gap – Incomplete ROI from technology investments due to poor adoption and fragmented data.
Rewards Effectiveness Gap – Misalignment between rewards programs and evolving business and talent priorities

For businesses, these gaps translate into scepticism around further HR tech investment, missed competitive advantage, and slower response to workforce disruptions. For Total Rewards teams, they limit the ability to deliver differentiated, future-ready value propositions.

The Path Forward: Strategic Shifts for APAC Rewards Leaders

The research outlines three imperatives that will define the Total Rewards agenda for 2026.

First, leadership development and talent excellence must become core to the rewards agenda. Nearly 58% of Total Rewards leaders plan to redesign pay-for-performance and career models to reward sustained growth behaviours rather than static roles.

In APAC, where leadership pipelines are under pressure, rewards must actively reinforce capability building, agility, and enterprise impact.

Second, AI readiness must be built as an end-to-end capability, not a standalone initiative. This includes investing in data foundations, analytics skills, and governance models that allow AI to meaningfully influence rewards design, benchmarking, and personalisation. Flexible, adaptive compensation structures—cited by 58% of leaders—will increasingly replace rigid pay ladders.

Third, AI-led adoption must drive measurable ROI. Over half of Total Rewards leaders intend to leverage advanced analytics to improve decision accuracy and timeliness. The shift is from structural pay design to adaptive pay systems—powered by real-time insights and aligned to outcomes rather than tenure.

Topics

#Benefits & Rewards

Author

Dhruv Mukerjee