Confidence among Australian employees in their ability to secure a new job has fallen to a three-year low, with little indication of improvement in the near future.
Speaking with HR Leader, Neal Woolrich, a director in the human resources advisory team at Gartner, revealed that Australian employees’ confidence in landing a new job has plunged to a three-year low, according to Gartner’s monthly Global Talent Monitor survey.
“What we found in the most recent survey is that confidence in job availability has fallen to a three-year low. It actually rose a bit in 2023, and it peaked in the second quarter of 2024. But in the year since then, it’s fallen about 5 per cent,” he said.
Although the decline might not appear dramatic, Woolrich warned it is a red flag, highlighting growing unease as “employees are quite concerned about the state of the labour market at the moment”.
Woolrich explained that the workforce’s confidence has plunged to a three-year low due to two major factors: rising unemployment and growing uncertainty around artificial intelligence.
“The unemployment rate’s been ticking up. But the other thing that’s really on their mind … is the impact of artificial intelligence. There’s just a lot of uncertainty about what the impact will be, and of course, will people’s employment be affected by the impact of artificial intelligence?” he said.
Interestingly, the survey revealed a paradox in employee sentiment. While confidence in securing new jobs has declined, Woolrich noted that employees’ intent to stay with their current employers has actually risen over the course of the year.
He explained that this trend isn’t driven by loyalty, but rather by employees feeling “stuck” in their roles, with few attractive alternatives available.
With fewer job opportunities available, Woolrich highlighted a worrying trend of employees’ discretionary effort and willingness to go above and beyond steadily “falling”, a development he warned is particularly concerning when occurring at the same time.
“We’ve got two things working together. Employees are staying with their employers, but at the same time, their discretionary effort is falling,” he said.
“That’s not a good combination for employers because you’re likely to see people staying in their jobs, feeling trapped and not really having the confidence to move, but at the same time working less than what they might otherwise do.”
So how do these findings impact employees and employers?
For employees, Woolrich explained that the declining confidence is affecting their willingness to ask for pay rises, meaning companies may not need to offer as large an increase to retain staff or attract talent from competitors.
“It’s really telling us that employees are probably not that confident in their ability to make a move. So that might have a moderating effect on things like what we call the compensation switching premium,” he said.
“How much of a pay increase do employees want if they were to leave their current employer and go somewhere else? So that might moderate that. Employees would need to temper their expectations around any pay rise from changing employers. On the flip side, now that’s a positive for employers. They might not have to pay as much of a premium to entice people across.”
However, Woolrich cautioned that declining discretionary effort presents a significant threat to productivity, workplace culture, and overall organisational performance, making it a critical issue for employers to address.
“But that other factor that I mentioned, discretionary effort, that’s one that employers will need to monitor and make sure that they’ve got a plan for that. We call that ‘resenteeism’. Employees sticking with their jobs but resenting it because they feel they don’t have,” he said.