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

Employees holding key positions are not willing to wait for future salary increases

Last updated:
Manoj Nair, Business Editor
1 MIN READ
Not offering regular pay rises is proving to be costly for businesses. And actually adding to their costs.
Not offering regular pay rises is proving to be costly for businesses. And actually adding to their costs.
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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.

What can employers do?

“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.”

Manoj Nair
Manoj NairBusiness Editor
Manoj Nair, the Gulf News Business Editor, is an expert on property and gold in the UAE and wider region, and these days he is also keeping an eye on stocks as well. Manoj cares a lot for luxury brands and what make them tick, as well as keep close watch on whatever changes the retail industry goes through, whether on the grand scale or incremental. He’s been with Gulf News for 30 years, having started as a Business Reporter. When not into financial journalism, Manoj prefers to see as much of 1950s-1980s Bollywood movies. He reckons the combo is as exciting as it gets, though many will vehemently disagree.
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