Half of employers plan to increase salaries in 2022 due to turnover, report finds

Half Of Employers Plan To Increase Salaries In 2022 Due To Turnover, Report Finds
Over half (56 per cent) of employers cited ‘Higher salary with the new employer’ as the main reason for the increasing employee turnover with ‘Career progression’ at second and ‘Better work-life balance’ at third.
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James Cox

Employee turnover more than doubled last year to 18 per cent from 8 per cent in 2020, and it is expected to increase further this year to 18.2 per cent, according to the latest HR Barometer Report from Adare Human Resource Management.

This is the highest rate since the report began six years ago.


Over half (56 per cent) of employers cited ‘Higher salary with the new employer’ as the main reason for the increasing employee turnover with ‘Career progression’ at second and ‘Better work-life balance’ at third.

In an effort to address this challenge, half  of (54 per cent) employers have or will be increasing salaries in 2022 with an average increase of 5.3 per cent.

This increases for smaller employers with less than 50 employees with six in 10 (63 per cent) increasing salaries by 6.6 per cent.

Commenting on increasing salaries, Sarah Fagan, managing director of Adare Human Resource Management, said: “While the market is seeing increases in salary, total reward is not just about the financial benefits. It should incorporate the intrinsic value brought through your business culture. It recognises and shares successes of employees, it balances paid benefits with those of a non-financial value. And, most importantly, it considers the employee experience as an asset that requires the right investment.”


Increasing cost of recruitment

The cost of recruitment has also increased to €7,491 per employee, up from €4,215 in 2021 and €6,895 in 2020. This figure nearly doubles for large businesses with 250+ employees to €14,690 per employee. And with an expected turnover of one fifth of this group of businesses, the financial cost for recruitment for these organisations is significant.

Staff Retention

Given the increasing cost of recruitment as well as a skills shortage across all sectors, it comes as no surprise that ‘Retention’ is the top HR priority for over half (52 per cent) of employers this year.

This is followed closely in second place by ‘Employee Engagement’ with 51 per cent citing it as a top priority.

Both go hand-in-hand as an engaged workforce is "more likely to be loyal and productive while also providing an employer with a real time gauge on how content employees are as well as identifying any issues".


Ms Fagan said: “During the pandemic, the employment landscape was in a state of flux as new ways of working emerged. However, as evidenced by our research, it is clear it’s no longer about new ways of working; the focus now is on people.

“It is broadly accepted that flexible, blended, hybrid and remote working are here to stay. But while the pendulum of work-life balance swings more favourably towards employee preferences, flexible work arrangements are only one aspect of the true Employer Value Proposition.

“Now more than ever, investment in People is of critical importance. Not only because of the expected turnover and associated costs of replacing employees, as outlined in our HR Barometer Report, but also because within the market there is a skills shortage. Developing a robust retention strategy will provide the competitive edge in maintaining the talent that you have and with the appropriate considerations will positively impact on any talent acquisition.”

Flexible Working

Flexible working arrangements was the top initiative introduced over the past 12 months by nearly four in 10 (39 per cent) of employers to support retention. Three in 10 (31 per cent) businesses increased salaries, nearly double (16 per cent) on the previous year. While just under a quarter (23 per cent) promoted employees internally in the last year to help retain talent.


“The Right to Request Remote Working Bill 2021 reinforces the Government’s commitment to remote working strategy and provides some clarity to employers. While remote and hybrid working really came to the fore during Covid-19, our research shows that it has been at the top of employer’s agendas since 2018.

“Employers need to take the time now to assess the business needs in line with potential remote working requests. Our advice to Employers is to take a considered approach to implementation of flexible working arrangements, remote and hybrid working.”

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