55 percent of employees working in business received a pay rise at the start of the year, with nearly half receiving no more than a 10 percent increase. While 52 percent said they expected a pay rise later in the year, 17 percent said they did not expect a pay rise at all this year, according to Trenkwalder's labor market survey conducted at the end of February.
The level of inflation has now been above the rate of wage growth since the autumn, meaning that real wages have been falling for almost half a year, and market estimates suggest that real wages are likely to fall by around 4% in 2023. Against this backdrop, Trenkwalder asked 500 competitive sector workers about their attitudes towards their pay and their current jobs.
The impact of the financial crisis is also felt by workers, and this is a factor in the 43% of respondents who are dissatisfied with their current level of pay. 35% of those dissatisfied with their pay would be satisfied with a pay rise of within 20%, while a further 24% would consider an extra income of between 20-30% to be an appropriate level. Of course, the majority do not expect their expectations to be met this year, with 55% expecting their financial situation to worsen this year compared to last year.
"In six months, the attitude of workers has changed a lot, and in a deteriorating situation, safety considerations have become much more important than even last autumn," pointed out József Nógrádi, Commercial Director at Trenkwalder. “We are seeing a decline compared to wage expectations at that time, and instead of 52% of respondents
now "only" 38 percent plan to change jobs within a year, and 68 percent consider job security more important than wage increases adjusted for inflation."
Wage gaps between occupations may widen in an inflationary climate as a result of varying rates of wage growth. That's why it's important to track how much of a change would prompt workers to look for new employment.
8% of all respondents would change jobs for as little as 10% more pay, and 57% would leave their current job for a 30% better alternative job offer.
This also shows an increase in caution in recent months, as in autumn the latter figure was as high as 68%.
As economic realities have already crossed the household threshold, trade-offs in workers' expectations are becoming increasingly visible. The fact that only 40% of workers said they would definitely quit their jobs if their benefits did not increase in 2023 is indicative of this trend, down from 68% last autumn.
Another hopeful development for employers is that 64% of all respondents are temporarily content to receive part of their pay rise as a non-monetary benefit (e.g. home office opportunity, training, travel expenses, etc.) for a transitional period of 1-2 years if their employer is operating in a difficult situation.
Read our first article on the Trenkwalder survey here