Bridging the productivity gap: Why employers must go beyond the budget

Ahead of the March 2025 federal budget, the Government had clear intentions to improve the cost of living and address Australia’s ongoing productivity challenge. The budget itself saw some positive but modest steps in this direction, declaring initiatives such as wage increases in aged care to incentivise workers in this critical industry, alongside energy bill rebates to reduce household financial stress. While this is welcome financial support for many, according to Reward Gateway, there is more to be done in addressing the core issue of declining productivity, particularly within the workplace.

With productivity continuing to decline, and workplace burnout on the rise, Reward Gateway’s latest Workplace Engagement Index highlights the urgent need for holistic workplace support to close the growing productivity gap. To build on the steps the Government is taking, and to see change across all industries, Kylie Green, APAC Managing Director at Reward Gateway believes employee wellbeing is key — focusing not just on salaries, but on meaningful initiatives that enhance employees overall wellbeing and financial security. 

“With cost of living front of mind in last night’s budget, the Government was quite vocal in its intention of investing in a more competitive, productive and dynamic economy. While announcements such as wage increases for aged care workers and energy bill rebates are certainly a positive step in this direction, there is still quite a way to go to better support employees and bridge the productivity gap that remains evident in workforces across all sectors”, said Kylie.

“At Reward Gateway, our latest Workplace Engagement Index shows a 30 per cent decrease in the number of employees feeling productive in the workplace in 2025, with over a third experiencing burnout. While wage increases and financial support play an important role in alleviating financial stress, there’s a lot more to be done in supporting the overall wellbeing of employees. 

“Business leaders across Australia are already starting to acknowledge this, with our own employee discounts program showing an increase in employers seeking offers on everyday essentials to better support their teams and find ways to help increase disposable incomes beyond their paycheck. While tax cuts may offer $532 per year, employee discount programs can provide more meaningful savings of up to four times this.

“However, bridging the gap between awareness, and meaningful, lasting change still remains a challenge. For business leaders looking to make an impactful change, the very first step is to stop and consider whether your existing employee value proposition is meeting the individual needs of your team.

“While there is no one-size-fits-all solution, a helpful starting point is to ensure you’re building on three core principles. Financial security, psychological safety, and a culture where your employees feel genuinely valued. Strategies can include a range of offers from hybrid work structures, professional development opportunities, rewards and recognition programs, annual leave policies or wellbeing initiatives that support financial, mental and physical wellbeing. The main thing is that it feels tailored and intentful.

“By taking intentional steps to prioritise a more holistic approach to employee support and benefits, employers can create a workplace where people don’t just survive, they thrive.”