How Leaders Can Keep Their Teams Engaged Amid The Pay Paradox
Despite rising salaries and day rates, workers in the digital, marketing, and creative industries aren’t feeling any better off. This is what is being coined as the ‘pay paradox’, which is evident in the data presented in our Creative Industries Census 2025, published earlier in May. While permanent salaries have grown by 5.8% and freelance day rates by 7.5%, the cost of living vastly outpaces these increases. In other words, standards of living remain the same - or in some cases, are worse.
As part of its Plan for Change, the Government has taken steps to deliver on its pledge to raise living standards by increasing the National Minimum Wage. This uplift has been designed to stimulate local economies by increasing consumer spending on the high street, kickstarting economic growth. However, April also saw a rise in council tax and energy bills. These increased pressures raise concerns that any wage increases are offset by broader cost hikes.
The widening gap between what people earn and what they actually desire is causing dissatisfaction among workers. In addition to this, workers are being asked to do more with less; which is also adding to the feeling of dissatisfaction. As a result, over half (53%) of permanent employees believe their pay doesn’t reflect their skills and experience. This growing disconnect between compensation and contribution feeds into the disillusionment.
So, how can leaders keep their teams engaged amid this ongoing pay paradox?
The true cost of feeling undervalued
Primarily wages are a financial transaction, yes. You do the work. You get a market-value compensation for the completed work. But pay is also psychological - it’s a signal of worth. When employees feel underpaid, they feel overlooked, and when they feel overlooked, they underperform. An underperforming workforce can hinder corporate progress, stifling opportunities for financial growth.
According to Gallup’s State of Global Workplace Report, global employee engagement dropped two points to 21%, with low productivity costing the global economy $438 billion in 2024. “This marks only the second decline in engagement in the past 12 years — a worrying sign for organisations already struggling with productivity.”
It’s important to realise that business leaders and managers cannot wait for this tide to pass. The issue is pervasive, but it cannot be ignored. To combat the job disillusionment many workers are experiencing, it will require thoughtful leadership and care to keep teams motivated. And motivated teams are vital to harness the $9.6 trillion in potential global productivity, according to the same Gallup Report.
Restoring a sense of worth
In stable times, the typical response to employees feeling undervalued would be to enter pay negotiations or offer financial incentives; but with businesses juggling financial complications and increased ROI expectations, leaders must instead find more sustainable ways to engage their talent. Real engagement and long-term retention stem from how employees experience their value on a day-to-day basis, not just from the number on the paycheck.
Here are some strategies to counteract the effects of feeling undervalued:
1. Make Recognition Routine
Only 57% of companies conduct annual salary reviews, leaving a significant portion of employees in the dark about how their hard work will be recognised. This is a missed opportunity to not only talk about money, but also to reinforce how employee effort is valued.
Businesses need to spend time creating environments where people feel seen and supported. Recognition doesn’t have to be grand, it has to be consistent. Build a culture that regularly takes a moment to acknowledge employee contributions and hard work. If you set an example that’s quick to praise, your team will follow suit. Positivity begets positivity.
2. Reinvest in Career Progression
More than half (53%) of professionals are planning to change jobs in the coming year, with salary and bonuses cited as their top motivator. Career progression is a close second. Yet 36% of permanent employees haven’t received formal training in the past year. There is a clear appetite for growth that is not being met.
People want to feel like they’re moving forward. Career development conversations should happen more often - quarterly, not annually. Tie these discussions to tangible outcomes that employees can work towards, like upskilling support, exposure to different business verticals, new responsibilities and mapped paths to promotion.
By reengaging your team through expanded learning and development initiatives, you're also helping them prepare for the future of work. Ignoring development isn’t a cost-saving measure - it’s a talent and a strategic risk.
3. Address Mental Fragility Head-On
The mounting pressures of our always-evolving workplace environments and financial instability are impacting how we think, feel and perform. People are stretched thin, culminating in a collective mental fragility. Mental well-being now plays a central role in workplace satisfaction, with individuals across demographics ranking it among their top five priorities. And yet, 59% of businesses offer little to no support.
Organisations that lack adequate mental health support can make people feel like they are on their own in figuring out the prevailing uncertainties. Isolation at work drives disengagement, absenteeism, and attrition.
Leaders have the responsibility to foster psychologically safe spaces. By normalising mental health conversations and providing accessible support, workers will feel more at liberty getting the help they need - before it’s too late. Prevention is also better than a cure. So strengthen your team’s resilience by strengthening the supportive scaffolding.
4. Prioritise Fairness and Transparency
Our census data shows that the creative industry still faces notable disparities between marginalised and underrepresented groups. Closing these gaps starts with leaders owning the data and choosing to act on it. It’s not always comfortable to have these conversations, but transparency builds loyalty.
Initiatives like our Earn Your Worth pledge are key in enacting fairer pay systems. We believe that talent should be paid fairly based on their skills, experience, and ability to do the job, not on their perceived worth or ability to negotiate. By removing salary history from hiring conversations, we help level the playing field and reduce bias in pay decisions.
In addition to signing up to the #EarnYourWorth pledge, explain how salaries are benchmarked. Make pay bands visible. Be open about when raises are feasible - and when they aren’t. When there is trust that management has the best interests of its employees at heart, the entire workforce will be invested in the shared success of the company.
5. Reimagine Benefits as Value
When financial leeway is limited, benefits become an important tool to demonstrate value - especially when supporting overall well-being and balance. Holiday allowance and flexible working consistently rank among the top benefits that professionals across all age groups are seeking from their workplaces. These are the benefits that actively help people support the demands of modern life.
Benefits can serve as a reflection of how leaders trust and respect their people. Giving employees the space to prioritise their personal lives without a professional cost, they will feel valued. Moreover, proper rest can result in a more motivated and creative team. During financial constraints, the opportunity to enjoy life outside the office matters significantly more in driving employee engagement.
While money talks, so do values and willingness to ‘invest’ in your people. The pay paradox will continue to threaten to depower and demotivate the workforce, but businesses that reinforce a sense of worth among employees will be the ones that thrive. Now is the time to listen, adapt, and lead with intention.
Our Creative Industries Census 2025 is packed with the data leaders need to make informed, future-ready decisions. Get insights on how to best engage talent, where to invest in benefits and how to guide career progression. Download the full report here: https://www.majorplayers.co.uk/blog/2025/04/the-creative-industries-census-2025
