Increase in Staff Departures Linked to Wage Stagnation? Almost Half of Businesses Admit to This Issue
In the current economic climate, many employers are grappling with the decision to delay or reduce pay rises for their professional and white-collar workers. However, according to a recent report by Robert Walters, these decisions could have significant consequences on employee engagement, retention, and company culture.
The guide, designed to facilitate transparent, evidence-based conversations about compensation and expectations, reveals that unmet expectations are pushing employees to reconsider their options. Chris Eldridge, CEO of Robert Walters UK&I, warns that with AI tools streamlining the job application process, employees have more opportunities than ever to explore new roles.
The research shows that among employers who delayed or reduced pay rises, 64% observed signs of employee disengagement. This indicates that when professionals feel undervalued financially, they are more likely to feel disconnected from their work. Moreover, about 29% of these employers reported higher staff turnover, suggesting that professionals who do not receive expected salary increases are more inclined to leave their jobs in search of better compensation.
From the employee perspective, 72% of those who did not receive a raise reported actively looking for new job opportunities. This shows that delayed pay rises can lead to a significant increase in job searching among affected employees.
Even among those who did receive an increase, 58% said it was lower than expected. This widespread perception of underpayment can further erode employee satisfaction and retention. Sinead Hourigan, Global Head of CX, Commercial and Customer Experience at Robert Walters, emphasizes the importance of salary benchmarking and market insights for employers.
Companies are starting to feel the effects of these decisions, with Chris Eldridge, CEO of Robert Walters UK&I, noting that they are experiencing the consequences of these choices. To navigate these challenges, Robert Walters advises employers to consider offering meaningful career development, flexible working arrangements, and internal mobility pathways beyond pay.
The organizations that succeed will balance cost control with a thoughtful, market-informed approach to employee engagement. To find out more about salary benchmarking, visit: Robert Walters Salary Survey. For up-to-date insights into pay levels and hiring trends, employers can refer to Robert Walters' 2025 Salary Survey to help make informed decisions.
- Unmet expectations in personal-finance matters, such as pay rises, are pushing employees to seek new opportunities in business, potentially leading to a significant increase in employee turnover.
- With AI streamlining the job application process, employees who feel undervalued financially might leave their current roles to find better compensation in other businesses, making it crucial for companies to consider alternative forms of employee satisfaction beyond just pay rises.
