Why 2025 is good news for workers chasing a salary bump

Almost three quarters of businesses are expected to give pay rises this year, a leading recruitment agency says, in a bid to retain employees amid cost of living pressures.

About 71 per cent of employers will raise salaries in 2025 in a bid to retain staff. Picture: iStock

Almost three quarters of businesses are expected to give pay rises this year, in a bid to retain employees amid cost of living pressures.

Workers are hanging out for that raise, with 22 per cent claiming they will find jobs elsewhere should an insufficient pay rise be given.

That’s according to a salary survey from recruitment agency Robert Walters, which found that the number of employees confident they would receive a salary bump in 2025 had dropped from previous years, indicating that a larger number of workers understand the impact of economic pressures on their employers.

But some had also given up ­aspirations, Robert Walters chief executive Shay Peters said.

“We’ve obviously seen shifting labour force dynamics over the past five years since Covid, but we have actually seen inflationary pressures start to really impact the labour market,” Mr Peters said.

“What I get a sense of from having viewed the responses is that there is a diminished level of aspiration within the Australian economy at the moment.”

About 64 per cent of respondents were expecting a pay rise in 2025, slightly less than the 71 per cent of employers who confirmed they were planning on lifting their workers’ salaries.

Not all pay rises are in good faith, with 77 per cent of employers saying they believe their staff already receive a high enough wage. But 85 per cent of employees said the increases received over the past year did not match increases in the cost of living.

Mr Peters told The Weekend Australian it was likely that increases received last year were minor.

Robert Walters was expecting a tug of war to play out over the next 12 months, as employers ­battled to keep staff happy.

By the end of 2025, the firm expected the market to have swung in favour of the employee, with workers expected to gain back their confidence in 2025 and begin to seek opportunities elsewhere.

Supporting that hypothesis was a finding in the survey that showed 76 per cent of employers were looking to hire this year, Mr Peters said.

Similarly, 56 per cent of employees have expressed interest in moving roles, with the Robert Walters survey finding that the number of roles available will ­exceed the number of available candidates.

“As interest rates start to drop and as aspirations start to rise, business confidence will start to increase, and so will the level of confidence in the labour market,” Mr Peters said.

“So what you will see is employees starting to move again, and that will create churn, and that will put pressure on salary and wages again. And I think the labour market will shift more heavily towards the employee.”

Robert Walters chief executive Shay Peters.

About 22 per cent of respondents said they would leave if their salary remained “undesirable”, while another 22 per cent said no career progression would be enough to see them walk.

Some 36 per cent said a competitive salary and improved benefits would be enough to keep them in their current role.

Mr Peters said a shift in the ­labour market may also stifle return to office mandates, with more flexibility offered as an employee benefit.

The Robert Walters survey found just 5 per cent of employees wanted to return to the office five days a week, compared to 20 per cent of employers wanting them to return. Only 1 per cent of ­employers supported a fully remote workforce, compared to 14 per cent of employees.

The survey found that more employers supported hybrid arrangements than employees, with 70 per cent of employers in favour and 53 per cent of employees in favour.

The survey comes as a recent report, comprising the pay slips of 1.1 million employees, found that technology sector workers were paid a median of $20 an hour more than other staff working in other industries.

Tech workers were some of the highest paid in the nation, with a median salary of $63.50 an hour.

Trailing tech was construction, on a median of $52.60, up 6.9 per cent over the past 12 months, then healthcare on a median of $47.50, manufacturing and logistics on a median of $42.30, and retail, hospitality and tourism on a median of $34.60.