Salary Increases Deferred, Employee Turnover Rises Amid Economic Downturn

Business leaders are making tough choices to manage costs in a tough economic climate, but this may be backfiring as nearly half of them report rising employee turnover after deferring salary increases. The disconnect between employer decisions and employee expectations is growing, with a significant number of employees actively seeking new job opportunities. While employers may be prioritizing cost control, this move is threatening morale, retention, and company culture. Employer actions are not without consequence, as unmet expectations lead employees to reconsider their options.

Key Takeaways:

43% of respondents reported disengagement within their teams due to deferring or reducing salary reviews.
77% of business leaders cited budget constraints and business performance as the top reasons for delaying or reducing pay rises.
59% of employees who didn't receive a pay rise are actively job hunting.
67% of employees who received a pay rise said the increase was below their expectations.
43% of business leaders report a rise in employee turnover after postponing salary increases for professionals and white-collar workers.
Employee disengagement is a growing concern as 43% of respondents reported it in their teams.
Salary benchmarking and market insights are seen as important in managing employee expectations.
Employers are urged to offer more than just pay, including career development, flexible work, and internal mobility.

Statistics:

43% of business leaders have reported a rise in employee turnover after deferring salary increases.
77% of business leaders cited budget constraints and business performance as the reasons for delaying or reducing pay rises.
59% of employees without a pay rise are actively job hunting.
67% of employees who received a pay rise said the increase was below their expectations.
43% of business leaders said the move to defer or reduce pay rises has led to disengagement within their teams.
77% is the percentage of business leaders who said budget constraints and business performance were the top reasons for delaying or reducing pay rises.

Sources:

Robert Walters, Global Talent Solutions Firm
Samantha-Jane Gravett, Director at Robert Walters Africa