Balancing economic pressures with employee wellbeing

With Australia’s GDP growth stagnating, employers face growing pressure to achieve results without the needed resources – an issue that is also beginning to affect employees.

A new report from Reward Gateway has shown that one-third (34 per cent) of employees are now reporting frequent burnout, and another third (34 per cent) are feeling overwhelmed – a dynamic contributing to declining productivity.

Just 47 per cent of employees describe themselves as “frequently productive”, a sharp drop from 68 per cent in 2024.

With engagement also waning, 58 per cent of workers have considered leaving their jobs in the past six months – underscoring the importance of wellbeing initiatives and strategies.

HR leaders are responding by placing employee wellbeing at the forefront of their strategies. Nearly three-quarters (73 per cent) rank mental health as a top priority for 2025, followed by manager-led recognition (60 per cent) and financial wellbeing (59 per cent).

Employees echo this shift, with 43 per cent identifying recognition and reward as the primary driver of productivity – surpassing even competitive compensation (38 per cent).

“Australian workplaces are grappling with the dual challenge of boosting productivity while meeting rapidly evolving employee expectations,” said Kylie Green, managing director, APAC, at Reward Gateway.

“Employees now prioritise factors beyond pay, such as collaboration, connection, and alignment with organisational purpose. Intentional recognition and meaningful interactions are pivotal to fostering both happiness and productivity.”

With recognition emerging as a key productivity driver, managers are under pressure to deliver consistent, meaningful acknowledgment. While peer-to-peer recognition holds value, feedback and recognition from managers directly remain the driving source.

“Middle managers are navigating unprecedented complexity. They must balance operational demands with the ‘soft skills’ required to lead multigenerational teams. Developing these capabilities is essential in today’s environment,” Green said.

“Forward-thinking organisations recognise that their management teams are pivotal to engagement, productivity, and strategic execution. Investing in their development is an investment in the business’s future.”

The data shows that employers must address systemic stressors by embedding recognition, wellbeing, and manager support into their cultural DNA. In doing so, businesses can transform pressure into purpose, fostering environments where employees feel valued, resilient, and aligned with organisational goals.

“The labour market’s evolution demands a human-centric approach. Organisations that prioritise wellbeing and intentional leadership will not only retain talent but thrive in an era of constant change,” said Green.

Kace O'Neill

Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.