Jobs: Employers find freezing pay rises adds to high staff turnover

Dubai: Delayed pay rises for staff? Then, business owners can expect a jump in key employees deciding to quit.

That’s the crisis facing businesses who are choosing to save on costs where possible – and freezing salary hikes as one of the ways to do so.

According to new findings from the hiring consultancy Robert Walters, nearly half of business leaders polled have already seen an increase in employee turnover, especially from their white-collar ranks. (Data from individual markets such as the UAE has not been provided.)

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

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

Based on market data, businesses in the UAE are still keeping a steady place of hiring, with some sectors such as tech- and tech support sectors leading the way. So far, there is no delay creeping into any AI specific projects, sources add.

“We’re seeing more employers ask how they can retain their best people when pay increases aren’t on the table,” said Grundy.

“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.”