Do delayed pay rises lead to higher staff turnover? 56% of companies say: yes

New data from Robert Walters reveals growing concerns over employee retention and engagement

Nearly one in two business leaders report a rise in employee turnover after salary increases were postponed. This is the finding of a recent survey conducted by the international recruitment consultancy Robert Walters.

Amid ongoing economic uncertainty, many organisations are taking a more cautious approach to financial decisions. Fixed costs are coming under increased scrutiny – with noticeable consequences: salary increases are being delayed more frequently or implemented only to a limited extent.

While this might offer short-term financial relief, the study highlights long-term risks. According to 44% of respondents, postponing salary increases has led to a decline in team engagement. This trend could have lasting effects on corporate culture, employee motivation and staff retention.

“Organisations are under immense pressure to reduce costs – in many cases, salary increases simply haven’t been feasible this year,” explains Thomas Hoffmann, Managing Director Germany at Robert Walters. “In fact, three quarters of respondents cite budget restrictions and weak business performance as the main reasons for delaying or limiting pay rises. However, our data shows that these decisions come at a cost. Whether it's increased staff turnover or a gradual drop in motivation – businesses are already feeling the impact.”

The survey findings also point to a growing disconnect between business decisions and employee expectations. Of those who did not receive a salary increase this year, 36% are actively looking for a new job. Even among those who did receive a raise, 71% say it fell short of their expectations.

The message is clear: even though many employees understand the wider economic context, unmet expectations are prompting them to seek new opportunities

,adds Hoffmann. “With the application process now easier than ever thanks to AI-based tools and one-click applications on job platforms, many are actively testing their prospects in the market. This makes professional salary benchmarking all the more important. Conversations about pay require the right timing – and above all, reliable data. Only then can arguments be substantiated, expectations managed realistically and a transparent dialogue facilitated.”

In addition to salary, Hoffmann recommends that employers place greater emphasis on alternative retention strategies – such as meaningful development opportunities, flexible working models, and clear internal career paths.

“More and more companies are asking themselves how to retain top talent when salary increases aren’t possible,” Hoffmann concludes. “In such times, attitude and communication are key – in other words, how openly, fairly and realistically HR issues are addressed. Smart and credible action can help strengthen trust and build lasting employee loyalty.”

The 2025 Robert Walters Salary Survey provides up-to-date market data on salaries and hiring trends – supporting business leaders in conducting open, fact-based conversations about remuneration and career prospects.