The latest industry research from HR and payroll software provider ELMO provides a grim picture on the struggles of many employees in Australia in meeting their basic living costs in the midst of hiked interest rates and rising prices.
The ELMO Employee Sentiment Index for Q2 2022 reveals that 70 per cent of employee respondents said the cost of living pressures are negatively impacting their wellbeing, with Gen Z employees being most heavily affected (82 per cent). Because of these rising prices, 45 per cent are struggling to meet their basic living costs
In particular, employees are hurting from the rising costs of petrol, housing, groceries and electricity over the past three months.
The proportion of workers who ranked the economy as ‘secure’ also dropped further to just 14 per cent, after a record low last quarter. This uncertainty is being seen as a factor as to why the threat of a ‘Great Resignation’ in Australia is dissipating, with fewer employees considering a career change in Q2 (25 per cent vs 29 per cent in Q1), and fewer actively searching for a new role in another company (15 per cent vs 17 per cent in Q1).
Commenting on the findings, CEO of ELMO Software, Danny Lessem, said the macroeconomic factors, along with the social, political, and environmental issues impacting Australia and the world, have caused employee priorities to shift.
“The overwhelming feeling of uncertainty prompted more employees to remain with their current employer with the expectation they will be rewarded for their contribution and loyalty,” Lessem said.
Despite their economic uncertainty, the number of employees anticipating a pay rise in the next year rose to 56 per cent, the highest figure for over a year. Similarly, those expecting a performance bonus jumped to 35 per cent. In addition, one in two employees are encouraged by the economy to seek a pay increase, with that figure higher among Gen Z (64 per cent) and Millennials (55 per cent) versus Gen X (37 per cent) and Baby Boomers (23 per cent).
“While most employers were encouraging the return to the office in recent months, it’s clear the cost of living pressures, which includes rising commuting and petrol prices, together with the colder winter months means employees will favour more flexible, hybrid and remote working conditions,” Lessem said. “For many, working from home is likely to be a preferred option to save money and remain healthy, at least in the short to mid-term.”
In Q2 the top three employee priorities remained consistent, being remuneration, bonus payments and incentives followed by flexible and remote working conditions and stability of the organisation. Given such priorities, ELMO noted that there is no surprise that the research found that 87 per cent of workers support increasing the National Minimum Wage after the federal election.
When looking at employee recognition and remuneration in April to June 2022, it was revealed that almost 70 per cent felt recognised for their contribution at work, 63 per cent said they are remunerated fairly and 47 per cent said they are rewarded when the company performs well. Lessem commented that executives who have taken note of the severe talent shortage in the market and implemented tailored strategies to reward and recognise top talent will reap the benefits over the coming months.
“The focus for business leaders in the second half of 2022 needs to be on empowering managers to understand the individual personal and professional drivers of their teams,” Lessem said. “It’s about implementing the right strategy to maintain engagement while driving a continuous commitment to high performance, collaboration and celebrating successes in a hybrid, health-conscious world.”