The Pay-Rise Trap: 83% plan raises, only 34% expect growth

Keep pay at market, and repair it where it is below. Stop paying the margin above market to everyone at the same rate: spend it on progression and workload in the teams people leave, and measure who stays.

Two numbers moving in opposite directions

Romania is heading into another raise season. In HR Trends 2026, a survey of more than 217 business leaders run from October to December 2025, 83% of companies said they intend to raise white-collar pay in 2026, and 85% blue-collar pay. In the same survey, the share of companies optimistic about their revenue fell from 43% a year earlier to 34%.

Put the two answers side by side and the raise changes character. When most companies expect revenue to grow, a raise is a share of that growth. When only a third do, it is a fixed cost paid in advance, to keep the company stable for one more year.

The exit causes a uniform raise does not reach

Pay is the first reason people leave, and the data says so plainly. In HR Trends 2026, salary remains the main driver of staff turnover, at 79%. In the Employer Brand Research 2026, a survey of 4,030 working Romanians in January 2026, insufficient pay is the most common reason for wanting to leave, at 49%.

The second reason is the same on both sides of the table. Employers attribute 39% of departures to a lack of advancement. Among the reasons employees give for wanting to leave, a lack of career growth stands at 37%. A raise applied to everyone at the same rate changes neither figure: a person who sees no next step still sees none after the raise.

Two further causes sit outside pay. HR Trends 2026 reports that 28% of employees resign over excessive workload. And 26% of the employees in the Employer Brand Research give fear of losing their job as a reason to look elsewhere, a worry that a raise does little to settle.

When the raise is the right call

None of this argues for freezing pay. For 67% of Romanians, salary is the main reason to choose an employer: 64% among Generation Z and 71% among people with longer careers. Only 51% say their pay is high enough, against a European average of 58%. And 23% of the employers in HR Trends 2026 admit they pay below the market for similar roles.

If your company is in that 23%, the raise is a repair, and it should come first. The trap is narrower: the part of the budget above market, paid to everyone at the same rate, to defend against no particular risk.

Why the trap works on good managers

The raise is popular inside a company for the same reasons it is expensive: it looks fair, everyone sees it, and it lands at once. Nobody has to argue about who matters more. It buys a calm year, and calm is attractive in a year when only a third of companies expect revenue to grow.

What it replaces is the harder spending: training managers to run their teams well, and building progression that people can see. Both take months, both are hard to schedule, and both lose the budget discussion to a raise unless someone prices the alternative.

At a roundtable of employers in Brașov in September 2026, Aurelia Florea of Miele Tehnica România described what kept people at her company:

Paying at market stops the exits about money. It does nothing for the exits about going nowhere.

The reallocation: a trade, not a cut

Matching the market is the minimum. The trade happens at the margin: the part of the raise budget that would have gone to everyone at the same rate moves to the three causes that decide whether people stay.

• Manager capability

  Managers decide most of what an employee experiences as workload and as a next step. Train them to set priorities and to talk about progression.

• Visible progression

  Lack of advancement is the second exit cause on both sides of the table. Show career paths, internal moves and stretch assignments, with dates.

• Workload in the teams that lose people

  If 28% of resignations start with workload, the fix is an operations decision. Start in the one or two teams where exits cluster.

The arithmetic a CFO can run this quarter: price one avoided resignation at one-half to two times the employee's annual salary, the range Gallup gives for replacing one employee, and compare it with the manager-training and progression budget for the team that person would have left. The range is a US estimate from 2019, so treat it as directional for Romania.

Price your turnover at your own numbers

Enter your own figures. The result is what one year of staff turnover costs at the replacement range above, before any raise. The defaults are illustrative only.

The bottom line

Raising salaries is not the mistake. The mistake is letting the raise become the whole retention plan at a company that already suspects it is not working, so that it wins the budget every year against measures that would. The companies that get out of this loop do not cut raises. They show on one page what the raise buys and what the alternative buys, and let the arithmetic decide.

Our HR Strategy Advisory builds that page with you: the raise budget set against the cost of turnover, the capability of your managers, and progression paths for the teams you are losing people from.