Employers, managers, and HR professionals are navigating a complex environment in 2024, with ongoing changes to employment legislation, a slowing economy, high employee turnover rates, and the ongoing debate around hybrid work models.
To help SME business owners, we’re taking a look at the key trends that are shaping how organisations operate and how employees experience work.
Employee turnover: trends and retention strategies
For the past two years, the national job mobility rate has been running at 9.5%, its highest level since 2012. At the same time, the Australian Bureau of Statistics (ABS) reports the wage price index rose 4.2% in the year to December 2023 and the consumer price index rose 3.6% to March 2024.
These figures point to some easing in the highly competitive labour market conditions of the post-COVID period, however skilled employees are increasingly willing to switch jobs for higher wages, better opportunities, or a different job.
The Australian HR Institute’s latest Quarterly Work Outlook found a quarter of organisations report an annual employee turnover rate of 20% and above. While high employee churn is a feature of some industries - e.g. hospitality, retail, administration, and mining - businesses with high turnover report it creates ongoing pressure around recruitment, retention, and productivity.
To help retain valuable staff, employers surveyed by the AHRI were offering enhanced flexible working arrangements, increased learning and development opportunities, and improved support for employee wellbeing.
In the news: Employees retaliate by “rage applying”
A recent survey by recruitment company Robert Walters has found that 60% of Australian professionals had "rage applied” for new roles since the beginning of the year.
Rage applying is the term coined for employees applying for a new role in heated response to a bad day at work.
Robert Walters did the same survey in other countries, with the US, Canada, New Zealand, and South Africa all reporting rates over 60%.
Among the 2,000 Australian professionals surveyed, 65% said being in a toxic workplace culture was their primary motivating factor, with poor work-life balance and an unmanageable workload other common drivers.
Nearly half of respondents (47%) said they had “rage applied” for multiple new roles within a short space of time.
Robert Walters' ANZ CEO, Shay Peters, noted the motivating factors “stem from the work environment and policies, which lie entirely within the employer’s control”.
Balancing return to office vs. hybrid work
We’re seeing a continuation of the tension between organisations directing employees to work in the office and employees wanting more flexible, hybrid work models.
The percentage of employees working in a hybrid capacity has decreased compared to the previous year's peak during the pandemic. Now, with the economy cooling and unemployment predicted to rise, more employers are mandating office attendance, typically between 3 and 5 days a week.
Others are redesigning their workplaces to make them more attractive while some - e.g. ANZ, Suncorp and Origin Energy - have indicated they will tie remuneration to office attendance for certain staff.
However, research indicates that employees will continue to push for flexible working arrangements, as they can boost productivity and promote wellbeing. A recent report by HR and recruitment service, Randstad, found more than half (56%) of Australian workers would consider quitting if they were forced to spend more time in the office. 55% of employees surveyed said flexible work is now non-negotiable and nearly two-thirds (63%) said they had made changes in their lives based on the assumption they could continue to work from home.
With employers legally allowed to request employees return to the workplace (if it is safe, complies with public health guidelines, and there is no reasonable justification for an employee to continue working from home) and employees able to request to work from home once they have been with their employer for at least 12 months, organisations will have to find a balance between these opposing motivations.
Legislative changes: casual workers and employees’ right to disconnect
Recent legislative changes brought in by the Closing Loopholes Act No. 2 have emphasised employee protections, especially around casual employment and workers’ right to disconnect from work.
The definition of casual employee has been amended and now focuses on the 'true nature, real substance and practical reality' of the employment as well as whether the employee is entitled to be paid as a casual (e.g. a casual loading or a specific rate of pay for casual employees).
There is also a new pathway for casual conversion based on employee choice rather than employers offering it.
New regulations around the "right to disconnect'' empower employees to reasonably refuse work-related contact outside working hours without facing repercussions.
Contact from an employer will typically be considered reasonable if the worker is paid to be on-call or their job description requires it, and the contact is during an emergency or to change conditions of work, e.g. location or hours.
The emphasis is on resolving issues at the workplace level, but employees can seek “stop” orders from the Fair Work Commission and employers can be fined for breaches.
Employers should start reviewing and potentially adjusting communication expectations and employment contracts to align with the new provisions that commence from 26 August 2024 for businesses with more than 15 employees and 26 August 2025 for employers with fewer than 15 employees.
Redundancies dropping
The annual retrenchment rate to February 2023 was 1.4%, the lowest annual rate on record (since 1972). This follows a high number of retrenchments during the COVID pandemic in the year ending February 2021 (21.6%).
The Australian HR Institute Quarterly Work Outlook reported that 22% of employers plan to make workers redundant in the March quarter of 2024, down from 31% in the December 2023 quarter.
70% of organisations reported they were adopting tactics to avoid or reduce redundancies, including raising prices, reducing wage and operation costs, limiting the use of non-permanent workers, and implementing recruitment freezes.
Our advice
Today's workplace trends demand agility and a proactive approach from employers and managers to work with employees to build trust and create supportive work environments conducive to satisfaction and success.
Workers want flexibility and to work for companies that prioritise employee wellbeing and offer a competitive range of benefits and rewards.
In return, organisations that accommodate individual preferences and foster an open culture can reap productivity and loyalty benefits that come from having a talented, motivated team. They can also navigate change and challenges more effectively.
