Brace for Impact: Seven in Ten Australian Employees Staying Put in 2023 as Recession Fears Upset Career Plans

• The Great Resignation is over but so is “quiet quitting” as promotions, pay rises and career development are increasingly on the employee agenda
• Baby Boomers and older Gen Xs who have experienced a recession first hand are most concerned about economic conditions impacting their careers

The Great Resignation is over as rising rates and recession fears start to impact employee behaviour, according to the latest industry research from HR technology provider ELMO Software. The study, which surveyed more than 1,000 Australian employees, found that 81% of employees are concerned about a recession in Australia with 70% overall planning to stay with their current company in 2023.

The research revealed that recession fears are encouraging 34% of employees to stay put in their jobs. A further 16% said the prospect of a downturn is encouraging them to look for a new job with their current employer while 20% of employees plan to stay put in their current job regardless of economic conditions.

Tech and professional services staff were most concerned about a recession (88%), followed by retail and construction workers (87% each). Overall, half of Australian employees believe that either rising interest rates or the prospect of a recession will impact their career plans.

The renewed focus on their current employment situation is resulting in employees taking a more proactive approach to managing their career. The research found that the number of employees likely to ask for a pay rise or promotion in the coming year has increased to almost half (44%), up from 36% in 2021.

At the same time, calls for a return to the office appear to have been heeded. Less than a quarter of employees expect to work from home full time (22%) in 2023, down from 26% a year ago, while 35% plan to work from the office more frequently in the year ahead compared to 2022. Around a third (34%) of employees plan to work from home part time, down from 42% this time last year.

Interestingly, face time in the office is proving to be more reassuring than FaceTime: employees who work from home full time are more likely to be concerned about a global recession (84%) compared to 74% of those who work on site/in the office full time and 83% of those hybrid working.

Danny Lessem, Co-Founder and CEO of ELMO Software says these findings are a very clear warning to employers not to become complacent when it comes to managing their current employees.

“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.”

“This research debunks the notion of “quiet quitting”. While turbulent economic times are driving employees to stay with their current employer, they are being loud and clear about what they want and need.

“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.

“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.

Generational divide

The research also highlighted some stark generational differences in career approach during a downturn and the challenges that companies face in managing a multi-generational workforce.

The level of concern about the impact of a recession rises with age, with Gen X and Baby Boomers being the most concerned. Gen X is most likely to stay in their jobs due to a recession (36%), while Gen Z is most likely to say they will look for a new job within their company (22%).

Compared to this time last year, the stability of an organisation has become more important to jobseekers. Not surprisingly, the stability of an organisation is far more important for older employees, with 52% of Baby Boomers ranking it as a top five priority, compared to just 28% of Gen Z and 35% of Millennials.

In contrast, money pressures were most likely to be on the mind of Millennials, the generation most likely to be getting married, having children and buying a house. More than half (56%) of Millennials believe that rising interest rates will impact their career plans in 2023 cf. Gen Z 46%, Gen X 49%, Baby Boomers 34%) Salary was a top 5 priority for 47% of Millennials compared to only 39% of Gen Z. The opposite was true for flexibility which was more important for Gen Z and Gen X, than for Millennials.

Overall, employees still think the jobs market is in their favour – but not by much. 38% said it was a candidate’s market, while 34% said it’s now an employer-led market. Gen Zs are the most confident about the jobs market – almost half still believe it’s an employee’s market (cf. Millennials 41%, Gen X 34%, Baby Boomers 37%). At the same time, Gen Zs were most likely to plan to work from the office more frequently this year compared to 2022.

Danny Lessem commented:

“We’re starting to see differences emerge between Baby Boomers and older Gen Xs who have experienced a recession first hand, and younger workers who are yet to go through a downturn in their working lives.

“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.