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A new report shows Australian employees are currently grappling with a severe decline in financial wellness, raising concerns about its potential ramifications for their organisations.
Gartner’s Global Talent Monitor Survey, which included responses from 965 Australians, found that employees’ financial wellness declined to an all-time low of 24.4 per cent between January and March 2023. This marks a decline from the previous 28 per cent for the second consecutive quarter.
Aaron McEwan, vice president of research and advisory for the Gartner HR practice, said with rising inflation showing no signs of slowing, many Australians are facing serious financial hardship.
He warned its detrimental impact goes beyond merely dealing with financial constraints, emphasising it is “not only incredibly distressing personally, but significantly impacts their work life too”.
“As wages remain stagnant and few bonuses on offer, organisations risk losing employees as they prioritise household budget needs.”
This observation is supported by data which revealed active job search behaviour went up by 2 per cent in the same period, despite business confidence falling from 41.7 per cent to 39.7 per cent and perceptions on job availability staying the same at 57.6 per cent.
“In the current economic environment, it’s risky for employees to jump ship as it’s usually ‘last one in, first one out,’” Mr McEwan said.
But under dire consequences, such as if they’re struggling financially and are faced with a poor manager, he noted it’s possible employees will take a chance.
So, what are employees looking for in their workplace?
In the face of financial hardships, compensation rose to become the third-highest factor influencing attraction for Australian employees, marking an increase from the previous quarter.
Interestingly, work/life balance and location still topped the list of priorities among Australian workers, coming in at first and second place, respectively.
Other factors seen as drawcards by employees include respect, vacation, stability, manager quality, future career opportunity, co-worker quality and ethics.
Findings also showed manager quality is still the strongest driver of attrition for Australian employees. This is followed by people management, work/life balance, respect, compensation, future career opportunity, recognition, co-worker quality, location and ethics.
“Work/life balance remains a driving force when employees are deciding whether to stay in their current role or move on,” Mr McEwan said.
The same survey also showed how strong leadership can make an impact on employees’ career decisions.
“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,” Mr McEwan said.
He said organisations can help alleviate this stress by extending employee programs that support them, including financial planning services that offer access to financial advice or the option to stay at home to reduce commuting costs.
The report noted that as the new normal for hybrid working arrangements is settling, many organisations are beginning to order back staff into the office for collaboration and innovation.
However, by doing so, the study noted organisations are placing additional financial strain on employees that are already struggling.
“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,” he concluded.
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