Drivers of employee attraction and attrition in today’s turbulent economy

Human Resources: Australia’s workforce is facing a challenging time as rising interest rates and soaring living costs take a toll on their financial well-being. With inflation showing no signs of slowing down, many employees are grappling with serious financial hardships, impacting both their personal lives and work performance.

The Gartner data, collected between January and March 2023, paints a worrisome picture of the financial wellness of Australian employees. The survey revealed that financial wellbeing has hit an all-time low, declining for the second consecutive quarter, from 28% to a concerning 24.4%.

The Vice President of Gartner’s HR practice, Aaron McEwan, expressed his concern, stating, “As wages remain stagnant and bonuses become few and far between, organisations are at risk of losing valuable employees who are increasingly prioritising their household budget needs.”

The survey findings showed an increase in active job searches during the first quarter of 2023, rising by 2%. Despite a slight dip in business confidence and no change in employee perceptions of job availability, workers are on the hunt for new opportunities that promise better financial stability and work-life balance.

Interestingly, work-life balance has now become the top factor influencing job choices, replacing location, followed closely by compensation in the Drivers of Employee Attraction and Attrition. The report also highlighted the impact of managerial quality on employee attraction and retention, ranking as the top reason for job switching in this quarter.

“With the current economic environment, employees may be cautious about changing jobs, as it’s usually ‘last one in, first one out’,” explained McEwan. “However, if they are facing financial difficulties and dealing with a subpar manager, they might just take the leap.”

The survey data reflects a workforce yearning for empathetic leaders who understand their challenges. Workers are calling on their organisations to provide genuine care, respect, and support during these tough times. Extending employee programs, such as financial planning services and remote work options to save on commuting costs, can greatly alleviate stress and foster a more loyal and motivated workforce.

Despite the “new normal” of hybrid work arrangements, many organisations are urging employees to return to the office for collaboration and innovation. However, this move is adding further financial strain to already struggling employees.

“Work-life balance continues to be a driving force behind employees’ decisions to stay or leave a job,” said McEwan. “Employers must clearly communicate the reasons for returning to the office and consider funding social gatherings to reduce the financial burden of commuting for their staff.”

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