Job insecurity is hurting young Australians and their companies

Contrary to the beliefs of many business leaders, job insecurity hurts employee productivity. As young Australian workers struggle with high job insecurity, it’s up to their employers to alleviate the pressures.

Thirty per cent of workers aged 18–24 (Gen Z) report feeling insecure in their work, while the figure sits at 18 per cent for Australian workers over the age of 55. These and other trends were unearthed in ADP Research Institute’s People at Work 2023: A Global Workforce View report.

The low job security could be behind the trend that’s seeing younger Aussies looking out the door while some look to start their own businesses altogether. Thirty-three per cent of Gen Z workers have considered changing industries in the past 12 months, and 29 per cent are considering starting their own businesses.

Though job security is high across the board for young workers, the trend is most prevalent in the IT, telecommunications, and media industries. Fifty per cent of Gen Z IT and telecommunications workers are feeling the sting, while 39 per cent of those in media are reporting high job insecurity.

The report made it clear that economic uncertainties are affecting worker confidence across the board, though younger workers might be most affected. Many Australians (51.3 per cent) believe that no single profession will be spared from the effects of existing economic pressures.

Similarly, low worker confidence can partially be laid at the feet of fears around new and emerging technologies. Approximately one in seven Aussie workers, or 14.3 per cent, believe AI will become the norm in their industry over the next five years.

That said, some predict that artificial intelligence (AI) will contribute far more jobs than it threatens to replace in coming years. According to the World Economic Forum, though 85 million jobs are set to be replaced by AI by 2025 worldwide, the technology will add 97 million new jobs over the same period.

“With the potential of AI across industries, it is likely that we will see new roles emerging, presenting promising new opportunities for workers,” said the managing director ANZ at ADP, Kylie Baullo.

The costs of job insecurity

It’s not unheard of for business leaders to stoke fears of potential layoffs or job replacements among employees to stir a fear-driven boost in work ethic. While this kind of leadership can sometimes secure short-term gains in productivity, research shows that job insecurity is more of a business risk to be managed rather than an asset. Specifically, insecure workers are more likely to:

• Be labouring under conditions like stress and anxiety that make it harder to be productive.
• Go for “visible” work and neglect less visible, albeit often important, work.
• Break the rules.

“When workers are worried about losing their jobs, their performance doesn’t improve, they break more rules, and they focus on selling themselves, often to the detriment of their teams and their organisations,” said Mindy Shoss, professor of psychology at the University of Central Florida.

How leaders can reduce insecurity

The ADP report concluded that employers have a central role to play in alleviating job insecurity. As noted by Ms Baullo: “Employers have a role to play in addressing workers’ concerns about job security.”

“Showing employees, they are valued and that their contributions are recognised through training, career progression opportunities, as well as highlighting the positive outlook for the company.”

Ms Baullo stressed that there is no one-size-fits-all approach to addressing job insecurity. It’s a complex phenomenon – one that depends on the particular industry, business, and personal preferences of the employees at hand.

“No two companies are the same. Employers need to have frequent and open conversations with their workers to address any misconceptions and ease unnecessary concerns,” she said.

“By reassuring workers that their jobs are secure where that’s the case, and highlighting opportunities for growth and development, employers can create a positive workplace culture that helps workers to focus on their job without worrying about the future. This, in turn, can help retain vital skills and experience.”

“If employers fail to address workers’ concerns about job security, they risk losing valuable talent, experience and expertise from their teams.”