Has the RBA rate cut greenlit job hunting for workers?

With the Reserve Bank deciding to cut interest rates for the first time since November 2020, many believe the economy is on the up – opening the door for new opportunities that employees can explore.

Recent research from HiBob discovered that as the economy begins to heal, nearly half of Australian workers (43 per cent) are ready to jump ship – seeking new opportunities off the back of economic stability.

This confidence to explore new job opportunities has been spurred by the Reserve Bank of Australia’s decision to cut the cash rate by 25 basis points, from 4.35 per cent to 4.1 per cent.

Optimism about the Australian economy quickly spread, with many hypothesising a shift away from the volatile conditions that have plagued both employees and employers over recent years.

According to the original data from HiBob, while three in four (74 per cent) plan to remain with their current employment – half are doing so due to the current economic situation rather than the genuine happiness of their work. Yet, if the economic climate were to improve, this retention could shift dramatically.

“Australian businesses are sitting on a talent time bomb. While employees may appear content now, they’re biding their time until the economy improves. But when that happens, it won’t necessarily be good news for employers,” said Damien Andreasen, vice president of APJ at HiBob.

According to Andreasen, the research uncovers a growing disconnect between employees and employers.

“Unless companies proactively address the underlying drivers of dissatisfaction – from a disconnect between hard work and actual career progression to poor guidance and feedback – a mass exodus is inevitable. The moment employees feel empowered to move – they will, leaving businesses scrambling to replace critical talent,” said Andreasen.

Pinsent Masons partner and head of employment law and reward (APAC) Aaron Goonrey agreed that there are a number of employees currently biding their time at an organisation, with hopes that a stable economy will give them that needed boost to search elsewhere.

“There are probably a number of people who are waiting to see where the economic headwinds are going and are either staying put or leaving. It’s similar to the ‘Great Resignation’ post the pandemic,” said Goonrey.

“Businesses will likely need to revisit their reward and recognition programs and engage with staff in assessing what is important to them – in many instances, the culture of a business is what attracts talent.”

“If things are easing in terms of interest rates, it may be that many people start looking around to see if the grass is greener, particularly if they have been subject to poor workplace culture or instances where the values of the business do not reflect their own.”

Employment Hero chief executive Ben Thompson somewhat disagreed with the notion of a mass exodus occurring based on the interest rate cuts – citing other moving variables that are impacting business and workers.

“The RBA rate cut might ease financial pressure, but it’s unclear if it will trigger mass resignations,” Thompson said.

“[For workers,] job security remains a key concern, and although our latest SmartMatch Employment Report shows job growth at 6.8 per cent YOY, it’s driven mostly by a surge in casual hires, while full-time hiring is slowing and hours worked have dropped significantly.

“This suggests businesses are adopting flexible hiring strategies, prioritising casual and part-time roles to manage costs.”

Thompson explained that the lower rate cuts don’t offer workers an immediate cure to financial strain – meaning many workers will continue with their current employment.

“Real wage growth is cooling – full-time wages grew just 3.3 per cent YOY in January, down from 7.0 per cent in December, and the median hourly wage fell -2.0 per cent from last month – and while lower rates are helpful, it’s not an immediate cure for financial strain,” he said.

“Businesses are likely to continue approaching hiring and wage increases with caution, prioritising cost management over expansion.

“Rather than a wave of resignations, we’re more likely to see workers holding onto stable jobs while businesses continue adjusting their hiring strategies, relying on more casual hires to navigate through economic uncertainty.”

The honeymoon period of the RBA cut rate may have also been short-lived, as consumer price index (CPI) data released yesterday (24 February 2025) revealed that inflation rates have stagnated – with underlying inflation rising.

Speaking on the CPI, Kyle Willersdorf, GoCardless account director, doubted the chances of another rate cut occurring anytime soon.

“Even with this month’s interest rate cut, [yesterday’s] consumer price index reading is a reminder that there’s still a long way to go before we’re really in the clear. This staid CPI reading pushes the odds of a consecutive rate cut down considerably, which is a bit of a blow for consumers – but an even bigger challenge for businesses already struggling to stay afloat,” Willersdorf said.

Although the economic climate moving forward remains uncertain, it’s in the best interest of employers to still prioritise retention strategies that implore workers to stay with their organisation – strategies that don’t simply rely on workers residing to make ends meet.