New research from global talent firm Robert Walters suggests that companies holding back on pay raises may be paying a different kind of price: their employees. According to the firm’s 2025 survey, 49% of U.S. business leaders have seen an uptick in employee turnover after delaying or reducing salary increases for white-collar workers.
As companies navigate an uncertain economy, many are making tough financial decisions to control costs. Salary reviews, once a routine part of employee engagement, have become one of the first things to be scaled back. But while this may help balance budgets in the short term, it may come at the expense of long-term workforce stability.
“Businesses are under immense pressure to keep costs down, and for many, salary increases just haven’t been feasible this year,” said Sean Puddle, Managing Director at Robert Walters North America. “Our research shows that these decisions, while understandable, are not without consequence.”
The data is telling. More than a third of leaders (36%) said their decision to delay pay hikes has led to noticeable employee disengagement. And among workers who didn’t get a raise this year, 57% are actively job hunting. Even those who did receive increases aren’t entirely satisfied—65% said the bump was lower than expected.
“There’s a clear message here,” Puddle added. “Even if employees understand the business pressures, unmet expectations are still pushing them to reconsider their options.”
The shift also coincides with technological changes that make job hunting easier. With AI-powered tools simplifying the application process, employees are more empowered than ever to seek greener pastures.
Robert Walters advises that even when raises aren’t possible, companies must stay competitive by offering non-monetary incentives—such as clear career progression paths, remote work flexibility, and strong internal mobility options.
“Culture and communication are key,” said Puddle. “When salaries are constrained, employees look at the bigger picture. Organizations that succeed will be the ones that maintain transparency, use market data to manage expectations, and invest in their people in other meaningful ways.”