Confidence in job market at lowest ebb since 2022

The increasing prevalence of AI in the marketplace is driving unease and creating an environment of uncertainty for employees, but less so for organisations.

Economic pressures and reduced hiring activity continue to fuel market volatility, and in turn, employee behaviour and attitudes have shifted into 2026, as identified by Gartner’s latest Global Talent Monitor.

Conducted in Q4 2025, the survey found that an alarmingly low 55.7 per cent of surveyed participants felt positive about the job market. In addition, intention to stay in current positions rose 5.2 per cent over 2025, while high-potential employees fell to 5.1 per cent.

According to Gartner HR adviser Neil Woolrich, “Australian employees are becoming more cautious about making career moves.” Fewer opportunities and heightened competition have lowered employee confidence, and in turn, created “a labour market ‘freeze’, where many workers feel stuck – hesitant to leave but also uncertain about what the market can offer”.

The Gartner survey revealed only 19.4 per cent of Australian employees were actively seeking new employment between October and December in 2025, representing an overall cooling of the job market and cautious behaviour going forward.

“Employees are opting for security over risk,” Woolrich said.

Discretionary effort continued on a downward trajectory, dropping to 17.9 per cent. During a hiring freeze, work is often distributed to remaining members, increasing workloads to employees that are at the same time uncertain in their ability to find new employment – and compounding “workplace fatigue, tension and disengagement”.

Feelings of unease are also emerging due to the widespread adoption of AI, which is automating tasks, redesigning workplaces and changing the very nature of work.

Woolrich said: “For employees, this shift can heighten uncertainty – they’re not just competing with other jobseekers, but with rapidly evolving technology.”

“Organisations are rethinking the roles and skills they need.”

Due to an ongoing cost-of-living crisis, it is no surprise that compensation remains a top reason for employee departure. And if pay rises are not an option, as identified in a recent report on the “job-hugging” phenomenon, offering realistic flexibility and expectations and managing workloads can ease the strain on struggling employees and positively impact organisational operation.

Also important, as identified by the head of HR solutions for people2people, Suhini Wijayasinghe, is “being transparent about career pathways in an uncertain market”.

The Gartner survey found that poor manager quality very much affected retention, reinforcing the need, as Woolrich highlighted, for “clarity, consistency and fairness”.

And with business confidence reaching a three-year high in such volatile times, it is necessary to translate this to employees. Communication of organisational direction and stability can be a deciding factor for employees nervous about their future.

Woolrich said: “Purpose-led leadership becomes essential – not only to retain talent, but to create confidence that an organisation can navigate uncertainty.”