Rising interest rates and cost of living pressures are having a significant impact on Australian employees in the workplace, increasing the potential for flight risks as they chase bigger pay packets to stay financially viable, according to Gartner, Inc.

Gartner’s latest Global Talent Monitor survey data, collected between January and March 2023, revealed that financial wellness is at an all-time low for Australian employees, declining for the second consecutive quarter from 28% to 24.4%.

"With rising inflation showing no signs of slowing, many Australians are facing serious financial hardship, which is not only incredibly distressing personally, but significantly impacts their work life too,” said Aaron McEwan, Vice President in the Gartner HR practice. “As wages remain stagnant and few bonuses on offer, organizations risk losing employees as they prioritize household budget needs.”

In fact, active job search behavior increased during 1Q23 by 2%, despite business confidence falling from 41.7% to 39.7% and employee perceptions of job availability staying the same at 57.6%.

Table 1: Top 10 Drivers of Employee Attraction and Attrition, Australia, 1Q 2023

^{Source: Gartner Global Talent Monitor Survey, 1Q23} 

Compared to 3Q22, work-life balance replaced location as the top factor employees are looking for in a job in 1Q23, followed by compensation (see Table 1). In terms of reasons to switch jobs, manager quality held strong this quarter, followed by people management and work-life balance, which made a reappearance back into the top three in 1Q23. Future career opportunity rose two places, demonstrating that employees are not afraid to leave their current role.

“In the current economic environment, it’s risky for employees to jump ship as it’s usually ‘last one in, first one out’,” said McEwan. “However, if they’re struggling financially and are faced with a poor manager, it's possible they will take a chance.”

Leading with empathy
Gartner’s latest survey data is reflective of a workforce that has become exhausted and unproductive. Workers are seeking great leaders that demonstrate empathetic leadership traits.

“Employees have faced a considerable amount of personal and financial turbulence in the past six months and they’re calling on their leaders to show genuine care, respect and concern,” said McEwan. “Organisations can help alleviate this stress by extending employee programs that support them, such as financial planning services that offer access to financial advice, or the option to stay at home to save on commuting costs.”

Forget forced socialization in the office
As the ‘new normal’ for hybrid working arrangements is settling, many organizations are starting to lure staff back into the office for collaboration and innovation. However, by doing so, organisations are placing additional financial strain on employees that are already struggling.

“Work-life balance remains a driving force when employees are deciding whether to stay in their current role or move on,” said McEwan. “Employers pushing workers into the office should provide a clear rationale and consider funding social gatherings as an unnecessary commute just adds further financial stress to those finding it tough."

Editor note
The Gartner Global Talent Monitor survey is made up of more than 6,000 employees in 40 countries, including 965 in Australia in 1Q23. The data is reflective of market conditions during the quarter. 

About the Gartner HR Practice
The Gartner HR practice brings together the best relevant content approaches across Gartner to offer individual decision makers strategic business advice on the mission-critical priorities that cut across the HR function. Additional information is available at http://www.gartner.com/en/human-resources/human-resources-leaders.

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