Recession fears causing workers to stay put

ELMO Software has released its ELMO Employee Sentiment Index – Australia (Period: Oct-Dec ’22). The report detailed that 81 per cent of Australian employees are fearful of recession, and 70 per cent said they are staying with their current employer in 2023.

According to ELMO, job security is much more positive than economic security. Fifty-two per cent of respondents believe they are secure in their current role, whereas 13 per cent are confident in economic security. Thirty-four per cent of those staying put at their jobs are doing so due to recession concerns.

ELMO Software co-founder and chief executive Danny Lessem said that although these results show a willingness to stick around, employers shouldn’t be complacent: “While the focus of many companies over the past few years has been on hiring the talent they need, we think their attention should be shifting to better managing the talent they have.”

According to ELMO, recession worries differ based on the age group, with Baby Boomers and Gen X being the most concerned. Job stability also sees varied results, as it is a key concern for 52 per cent of Baby Boomers and just 28 per cent of Gen Z. This divide may be due to job market opinions, with 47 per cent of Gen Z believing it’s an employee’s market. This dropped to 37 per cent of Baby Boomers and 34 per cent of Gen X.

As covered by HR Leader on 3 February, ageing workers aren’t feeling appreciated when looking for jobs.

Of the ELMO report, Mr Lessem commented: “We’re starting to see differences emerge between Baby Boomers and older Gen [Xers] who have experienced a recession firsthand, and younger workers who are yet to go through a downturn in their working lives.”

The Employee Sentiment Index said the workers in these industries are most fearful of recession: tech and professional services, and retail and construction, at 88 per cent and 87 per cent, respectively.

“Organisations should be aware of how their employees are feeling about the potential of a recession and what their individual priorities might be at this time. A one-size-fits-all approach to flexible working, salary and development opportunities is not the answer,” Mr Lessem said.

According to ELMO, more workers are confident in asking for a pay rise. In Q4 2021, thirty-seven per cent were encouraged to ask for an increase due to the state of the economy. In Q4 2022, this figure jumped to 47 per cent.

Mr Lessem continued: “In the absence of the automatic promotions and pay rises offered by new jobs, employees have indicated that they will be actively looking for opportunities to advance their careers within their current company.

“It would be a mistake to think that, just because they are choosing safety over taking a risk, employees are adopting a passive approach to managing their career. While external career moves might be on hold for now, employees plan to be proactive in asking for promotions, pay rises and opportunities to grow within their existing company.”

Employee opinions on remote working seem to also be shifting. According to the Employee Sentiment Index, 35 per cent of workers plan to be onsite more often in 2023. Twenty-two per cent expect their employer to allow full-time remote work. This figure stood at 26 per cent a year ago. Full-time remote working seems to have employees more worried about a recession, as 84 per cent had economic concerns. This dropped to 74 per cent when working onsite full-time.

Mr Lessem added: “For HR teams and people managers, this research emphasises the importance of regular performance and development conversations with your team members, ensuring salary benchmarking is up to date and succession plans in place so that internal talent is not being overlooked when hiring for roles.”

Jack Campbell

Jack is the editor at HR Leader.