Delayed salary increases lead to rising turnover among white-collar workers

Nearly half of business leaders have reported a rise in employee turnover after postponing salary increases for professionals and white-collar workers, according to new research by global talent solutions firm Robert Walters.

According to the group, in a tough economic climate, many employers are prioritising cost control, often by deferring or reducing salary reviews. While this may offer short-term relief, 43% of respondents say the move has led to disengagement within their teams, threatening morale, retention, and company culture.

“Businesses are under immense pressure to keep costs down, and for many, salary increases just haven’t been feasible this year. In fact, 77% of business leaders said budget constraints and business performance were the top reasons for delaying or reducing pay rises,” says Samantha-Jane Gravett, director at Robert Walters Africa.

“Our research shows that these decisions, while understandable, are not without consequence," she says.

The group says the disconnect between employer decisions and employee expectations is growing. Among those who didn’t receive a pay rise, 59% are actively job hunting. Even among those who did, 67% said the increase was below expectations.

“There’s a clear message here: even if employees understand the business pressures, unmet expectations are still pushing them to reconsider their options. And with AI tools streamlining the job application process, employees have more opportunities than ever to explore new roles. This is where salary benchmarking and market insights become so important," Gravett says.

Robert Walters urges employers to offer more than just pay, such as career development, flexible work, and internal mobility.

“When salaries are constrained, culture and communication matter more than ever. The organisations that succeed will be those that balance cost control with a thoughtful, market-informed approach to employee engagement," Gravett says.

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