Samantha-Jane Gravett | Director | Robert Walters Recruitment | mail me |
Nearly half of business leaders have seen an increase in employee turnover after delaying pay rises for professionals and white-collar workers. This is according to our new research.
As the economic landscape continues to evolve, I have seen many employers facing difficult financial decisions. Controlling overheads has become a top priority. In many cases, this has meant deferring or scaling back salary reviews. As a result, delaying pay rises leads to staff turnover, and this research confirms just how widespread the impact is.
While this approach may offer short-term savings, 43% of respondents reported that delaying pay rises has caused disengagement within their teams. Over time, this kind of disengagement can impact morale, employee retention, and overall company culture. Delaying pay rises leads to staff turnover and may also weaken the internal commitment needed for long-term growth.
The cost of pay delays
Businesses are under immense pressure to keep costs down. For many, salary increases simply haven’t been feasible this year. In fact, 77% of business leaders said that budget constraints and business performance were the main reasons for delaying or reducing pay rises.
From what I have seen, these decisions, while understandable, are not without consequence. Whether it is higher turnover or a gradual decline in motivation, companies are starting to feel the effects. And again, the pattern is clear: delaying pay rises leads to staff turnover, even in companies with otherwise strong cultures or leadership.
The survey also reveals a growing disconnect between employer decisions and employee expectations. Among employees who didn’t receive a pay rise this year, 59% said they are now actively looking for a new job. Even among those who did receive an increase, 67% felt it was lower than expected.
There’s a clear message here. Even if employees understand the pressures their companies face, unmet expectations are still pushing them to reconsider their options. And with AI tools streamlining the job application process, employees now have more opportunities than ever to explore new roles.
This is where salary benchmarking and market insights become essential. Workers who haven’t seen a pay rise may be planning to discuss their compensation during mid-year reviews. Employers will need market data to communicate credibly, show fairness, and manage expectations effectively.
Retaining top talent when pay increases are not possible
Beyond pay, I encourage employers to think creatively about what they can offer. These include meaningful career development, flexible working arrangements and clear pathways for internal mobility.
I have seen more employers asking how they can retain top talent when pay increases are not possible. When salaries are constrained, culture and communication become more important than ever. The organisations that succeed will be those that balance cost control with a thoughtful, market-informed approach to employee engagement.
To support business leaders in making informed decisions, the 2025 Salary Survey offers up-to-date insights into pay levels and hiring trends. This guide is designed to help leaders have transparent, evidence-based conversations with their teams about compensation and expectations.
