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Delaying Pay Rises Is Driving Staff Turnover, Say Nearly Half of UK Employers

June 2, 2025

Almost half of UK employers have seen increased staff turnover as a result of delaying pay rises for professionals and white-collar workers, according to new research from global talent solutions consultancy Robert Walters.

In a survey of UK business leaders, 47% admitted that postponed or reduced salary reviews had led to higher employee attrition, as organisations struggle to balance cost controls with retention. The findings come amid a broader climate of economic uncertainty, with many companies prioritising the management of overheads in response to shifting market conditions.

Chris Eldridge, CEO of Robert Walters UK & Ireland, acknowledged the pressures that employers are facing but warned of the long-term costs. “Businesses are under immense pressure to keep costs down, and for many, salary increases just haven’t been feasible this year. In fact, 64% of business leaders cited budget constraints and business performance as the primary reasons for holding off on pay reviews,” he said.

“However, our research shows that these decisions are not without consequence. Whether it’s higher turnover or a gradual drop in motivation, companies are starting to feel the effects.”

The data highlights a growing gap between employer actions and employee expectations. Among UK employees who did not receive a pay rise this year, 63% are now actively looking for a new job. Even among those who did receive an increase, 61% said it fell short of their expectations.

This disconnect is contributing to a wider sense of disengagement. Over one in three employers (36%) reported lower morale and reduced motivation in teams following delayed pay increases — a challenge that is particularly difficult to navigate in a competitive labour market.

Chris Eldridge added: “There’s a clear message here: even if employees understand the business pressures, unmet expectations are still pushing them to reconsider their options. With AI-driven tools simplifying the job application process, professionals can now explore new roles with unprecedented ease.”

Sinead Hourigan, Global Head of CX, Commercial and Customer Experience at Robert Walters, said companies should prepare for a rise in salary discussions in mid-year reviews, especially among workers who feel overlooked.

“This is where salary benchmarking and market insights become vital. Employers need to go into conversations armed with credible data — not just to justify pay decisions but to show fairness and manage expectations effectively.”

To support employers in this, the newly released Robert Walters 2025 Salary Survey offers comprehensive insight into current market rates, pay trends and hiring outlooks across a range of professional sectors. The guide is designed to help businesses conduct evidence-based, transparent conversations about pay.

With many businesses constrained on what they can offer in terms of compensation, Robert Walters is urging employers to think beyond salary alone. The firm’s research suggests that career development, flexible working, and internal mobility opportunities are increasingly important to professionals weighing their options.

“When pay rises aren’t on the table, culture and communication matter more than ever,” said Sinead Hourigan. “We’re seeing more employers ask how they can retain their best people creatively and thoughtfully. The organisations that succeed will be those that balance cost control with genuine investment in employee experience.”

As the cost of living remains high and employees continue to reassess their priorities, the message for employers is clear: inertia on pay and progression risks triggering costly talent losses — and recovering that ground will take more than budget alone.