Labor market under pressure: companies caught between salary increases and hiring foreign workers
Demographic changes and the shortage of key talent have long been driving adjustments in hiring strategies. Low unemployment and an increasing demand for workers are pushing companies to invest heavily in attractive working conditions, improve talent retention programs, and increasingly hire foreign workers. The latest research, Trends in Salaries and Employment, H1 2025, reveals that for more than half of employers (55.81%), salary increases will be conditioned on retaining current employees, while a quarter of companies will seek solutions to workforce shortages abroad.
Key Research Findings
60% of employers predict salary increases in H1 2025, while 40% do not plan any salary changes.
80% of employers do not anticipate significant changes in employee benefits, while 18% plan to introduce or increase benefits.
In 2024, companies faced the biggest hiring challenges in manufacturing, logistics & warehousing, and sales & procurement.
The average employee turnover rate in participating companies in 2024 was 11.3%.
The net employment outlook for H1 2025 is +43.65%.
A quarter of employers (25%) plan to hire foreign workers in 2025, with 19% recruiting from the Adriatic region, 12% from third countries, and 9% from the EU/EEA.
“The H1 2025 research highlights a clear shift in employer strategy—hiring foreign talent and adopting flexible employment models are key to attracting and retaining workers. Companies with a global approach and investment in career development will lead the talent race,” said Tamás Fehér, Operations director and board member for Manpower SEE.
Salary Trends Indicate Optimism in Early 2025
The research shows that 59.1% of employers plan to raise salaries in H1 2025, while 40.21% do not foresee changes, and 0.69% predict salary reductions. Among those increasing salaries, more than half (52.33%) will apply raises to all employees.
The competition for talent remains strong, and companies continue to strengthen retention strategies. For more than half of employers (55.81%), salary increases in H1 2025 will be tied to retaining current employees, while one-fifth of employers will raise salaries to attract new hires.
Despite salary increases, most employers (80%) do not plan major changes in additional benefits or financial incentives.
Among existing benefits, about 70% of employers highlighted performance-based bonuses, milestone awards, and team-building events as key employee perks.
Graph: What changes in monthly gross salaries are employers planning in H1 2025?
Competitive Salaries Remain the Primary Driver of Employee Turnover
Employee turnover remains a challenge, with 56.75% of employers reporting no increase in turnover in 2024, while 43.23% observed higher turnover compared to the previous year.
Comparing past years, the turnover rate was 12.4% in 2022, dropped to 10.0% in 2023, and increased again to 11.3% in 2024. Factors influencing turnover include industry, company size, labor market conditions, and internal factors.
According to the SATR H1 2025 research, the main reasons for employee departures were: higher salaries offered by competitors (reported by 40% of participating employers), retirement (reported by 37% of employers).
Graph: Fluctuation rate in 2022-2024
Hiring Outlook Remains Positive, Employers Looking to Foreign Markets
The net employment outlook for H1 2025 remains positive at +43.65%, following a slight decrease from the end of 2024 (47.42%).
50.79% of employers plan to hire more workers than they lay off. 7.14% of employers expect more layoffs than new hires. 29.37% foresee no changes in hiring levels. 12.70% remain undecided.
With low unemployment and persistent workforce shortages, hiring foreign workers has become a necessity. A quarter of employers surveyed will hire foreign workers in 2025.
Labor Market, Salary, and Company Research
The “Trends in Salaries and Employment, H1 2025" report provides insights into labor market conditions, employee turnover in the past year, hiring intentions, and planned salary and benefit changes for 2025, along with key salary trend comparisons from the past three years.
More information on current trends, salary movements, employment forecasts, and salary ranges is available at: https://www.raziskave-manpower.com/
