Nearly half of Irish business leaders admit they have seen an increase in employee turnover after delaying pay rises for professionals and white-collar workers, writes Jamie McCarron.

Recruitment firm Robert Walters noted that many employers are having to make tough decisions in order to control overheads by deferring or scaling back salary reviews.

However, while this approach may offer short-term savings, 38% of respondents said delaying pay rises has led to staff looking for jobs elsewhere.

Suzanne Feeney, Robert Walters Ireland manager, said: “Businesses are under immense pressure to keep costs down, and for many, salary increases just haven’t been feasible this year.

“In fact, 61% 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.”

Among employees who didn’t receive a pay rise this year, 63% said they are now actively looking for a new job.

Even among those who did receive an increase, 56% said it was lower than expected.

Recent studies show many Irish companies are prioritising targeted salary hikes for high-demand roles in finance and technology, over broad pay adjustments across the board.