Recent data from recruitment firm Robert Half suggests a shift in worker expectations for pay rises, as employers prioritise productivity amidst regulatory changes and increased financial pressures.
According to Robert Half’s Jobs Confidence Index (JCI), conducted in partnership with the Centre for Economics and Business Research (Cebr), 63% of workers remain confident in their job security over the next six months. However, the Index shows an eight-point drop in pay confidence, signalling a change in wage growth trends.
Robert Half’s findings indicate that the balance of power in pay negotiations is tilting back towards employers. The firm’s 2025 Salary Guide reveals that 70% of workers report greater difficulty negotiating pay increases compared to last year, despite many employees feeling they deserve higher wages. Reasons cited by workers for expecting raises include rising living costs (39%), annual expectations (29%), and exceeding performance goals (25%).
Employers Focus on Efficiency Over Wage Growth
Employers appear less inclined to increase wages further, with many turning their attention to improving operational efficiency. Robert Half’s research highlights that 44% of businesses plan to invest in automation and digital transformation to boost productivity, while 40% are focused on optimising workflow management.
Matt Weston, Senior Managing Director UK & Ireland at Robert Half, explained: “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.”
Weston noted that productivity levels in the UK have remained low, prompting companies to seek ways to streamline operations and better allocate resources. He added that while pay increases may slow, workers could still benefit from broader improvements, including advanced perks and benefits driven by ongoing developments in workplace policies.
The Broader Impact on the Workforce
The slowdown in wage growth comes as businesses face heightened financial pressures, including increases to National Insurance Contributions. These factors have reduced the likelihood of significant pay rises in the near term. Nonetheless, there are signs that employees could gain in other ways.
Weston highlighted proposals in the Employment Rights Bill, along with a growing business focus on offering competitive perks, as potential avenues for employees to benefit beyond their salaries. He suggested these measures reflect a broader recognition of the need to adapt to the demands of a modern workforce.
This evolving landscape suggests that while direct wage growth may falter, the future of work is likely to bring alternative forms of value for employees as organisations adjust to economic and regulatory pressures.
