Workers 'disillusioned' by recent pay inflation: That pay rise isn't coming Worker pay confidence declines as employers tighten budgets, focus on productivity, and contend with rising costs, new data reveals
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- 63% of workers are confident in their job prospects for the next six months
- But 70% are finding it more challenging to negotiate a pay rise
- 44% of businesses funnelling budgets into technology to enhance productivity instead
Worker pay expectations are cooling as businesses face rising costs and tax pressures, according to new data from recruitment firm Robert Half. The company's latest Jobs Confidence Index (JCI), produced with the Centre for Economics and Business Research (Cebr), shows a mixed outlook for employees.
While 63% of workers feel secure in their jobs over the next six months, real wage growth is slowing, and pay confidence has dropped by eight points. Robert Half's 2025 Salary Guide highlights that 70% of workers now find it harder to negotiate pay raises compared to last year. Despite this, many still expect increases, citing cost-of-living pressures (39%), annual expectations (29%), or high performance (25%) as justification.
Employers, however, are prioritising cost control and productivity improvements. Nearly half (44%) plan to implement automation and digital transformation, while 40% are focused on workflow optimization. With National Insurance Contribution (NIC) hikes adding to financial strain, Robert Half warns pay raises may be less likely in the coming year.
Matt Weston, Senior Managing Director UK & Ireland, at Robert Half commented:
"Workers have seen high wage growth in response to the cost-of-living crisis, which has led to a level of expectation among employees of continued pay rises. The reality, though, is that many firms simply can't sustain this, particularly with NICs set to increase.
"Given that the UK's productivity levels have remained stubbornly low, we are seeing a growing number of companies looking at ways to streamline current operations and better utilise resources. This is likely to continue until the economic climate settles from the recent upheaval we've experienced. However, that's not to say that workers will lose out overall. The proposals in the Employment Rights Bill and a general recognition within the business community that advanced perks and benefits are a must in the modern world, mean that employees will reap the rewards beyond their pay packets."
