The Australian workforce has undergone a dramatic transformation in recent years as attitudes to flexibility, productivity and culture have been flipped on their heads. During the pandemic, employees took control of the wheel and demanded more from their employers, with over half passively job-seeking in case their demands were not met. At the same time, we began to see employment trends like ‘quiet quitting’ spring into the zeitgeist for the majority of workers.

However, with economic challenges and a broadening skills gap forcing workers to stay put, Australian employers could soon find themselves back in the driver’s seat. But what does that mean for hiring retention strategies and the see-sawing employer-employee power balance?

Low job mobility signals a shift towards an employer-led market

Changing external factors have now led employees to become more interested in stability. As a result, the Australian Bureau of Statistics recently revealed Australia’s job mobility rate has dropped to 8% from a decade-high 9.5%. 

This sharp drop signals the first decrease in three years and is a clear indication that the power balance in the Australian job market is shifting. Contrary to the ‘loud labouring’ and ‘career cushioning’ trends that gathered steam during the pandemic, external pressures including the rising cost of living and widespread redundancies led to a 4% increase in tenure across all age groups.

While job mobility has remained highest among the youngest demographic with 13% of 15-24-year-olds changing jobs over the course of a year, the same cohort has seen a 3% drop from 16% just two years before. This indicates Australia’s junior workforce - and consequently, those most disproportionately impacted by high rents and energy costs - is becoming increasingly risk averse when it comes to switching roles in the current climate.

What does this mean for employers?

As employers begin to see the impact of this cautiousness on their retention rates, they should be conscious not to become complacent. Business leaders must acknowledge that high retention in the current environment may not necessarily correlate with high employee satisfaction. Whatever the economic environment, employees require acknowledgement and recognition to do their best at work, and employers should ensure they are on the front foot to deliver this.   

In fact, according to Gallagher, people with high wellbeing report 2.3x higher engagement at work, and with the average cost of hiring increasing from $10,000 to $23,000 per candidate in the past year, it pays to make employee wellbeing a core component of your business strategy.

As the cost of living continues to bite, employees across Australia are facing heightened levels of stress. These external pressures mean changing roles feels more daunting now than in recent years. Although the power dynamic has seemingly shifted back into the hands of employers, business leaders should not take increasingly long tenures as a sign of happiness and engagement. Instead, they should ensure they have the correct processes and reward systems in place to ensure staff feel seen and valued. Ultimately, if you invest in your employees, they will invest back in you with loyalty that transcends even the most turbulent economy.

By Kylie Green, Managing Director - APAC at Reward Gateway