Why getting employees back into the office could be driving them out of the company


Financial stress is worse than ever for Australian employees – so why are they more likely to leave their jobs?
View of an empty office

A recent survey by Gartner HR revealed employee financial well-being declined for the second consecutive quarter, from the already low 28% to 24.4%.

“With wages remaining stagnant and few bonuses on offer, organisations risk losing employees as they prioritise household budget needs,” Vice President of Gartner HR, Aaron McEwan, said in a statement.

Q1 saw job search behaviour rise slightly, by 2%, whilst business confidence declined by the same amount.

However, employee perceptions of job availability remain high at 57.6%.

Gartner, Inc found that if employees are unsatisfied with their jobs, this perception of job availability could encourage them to become flight risks.

Work-life balance, location and compensation ranked as the highest factors in employee attraction, while the highest drivers of attrition were manager quality, people management, work-life balance, respect, and compensation – in that order.

Gartner VP McEwan told Forbes Australia that it isn’t just financial wellness that’s hitting a low point – mental and physical health among employees has also been declining.

“It generally points to a workforce that is kind of burnt out… that’s likely to distract them from their work, it’s going to create all sorts of challenges for them, so we can kind of expect discretionary effort – productivity – declining as well,” McEwan said.

Looking forward

McEwan revealed to Forbes Australia that preliminary data Gartner had collected from Q2 suggests things are declining further.

With inflation, interest rates, and unemployment all showing signs of rising, financial well-being is going to continue to be a significant stressor.

However, there is light at the end of the tunnel.

The wellness data coming out of Asia seems to be much more positive than in the rest of the world. McEwan attributes this to the fact that they were hit by the pandemic first, and as a result, have been given more time to recover from the long-term personal and economic impacts of Covid-19.

If this is anything to go by, then McEwan says, “If we get through this difficult inflationary period, we might see things start to stabilise a bit more.”

Don’t rush employees back to the office

Although many might be eager to leave the pandemic in the past, McEwan believes that businesses are still grappling with its protracted impacts.

Accumulated trauma, mental illness, and burnout all play a role in the financial distress many are feeling now.

McEwan believes that letting employees continue to work from home is vital.

“People are going to want more and more autonomy over not just where they work, but when they work, how much they work, what they work on.

Vice President of Gartner HR, Aaron McEwan

“There’s no data that supports that in terms of driving higher levels of performance or productivity. The people that lose the most in being forced back to the office are women and carers, people with disabilities and Indigenous Australians.”

A 2022 study by the National Bureau of Economic Research found that the average Australian employee wanted almost two full work-from-home days a week, while the average employer was only planning for one WFH day.

This incongruence could be costing employers. 

“People are going to want more and more autonomy over not just where they work, but when they work, how much they work, what they work on. And we have to get to the point where we trust the people who do the work.”

How managers can minimise flight risk

Aside from allowing employees to keep working from home, McEwan believes there are other important steps managers can take to improve employee wellbeing.

Despite the fact that financial pressures are being felt more keenly, work-life balance and location still ranked as more significant employee attractors than compensation according to Gartner’s data.

And management quality, people management, work-life balance and respect all rank higher than compensation for drivers of employee attrition – signalling a significant shift in what employees expect from a workplace.

Gartner HR points to this data as a sign of an increasing desire for empathetic management styles.

Managers who offer flexibility and support are demonstrating to employees that they care – and according to Gartner HR Australians have long valued a healthy work-life balance, this can be helpful during times when employees might be more likely to become flight risks.

Another struggle for the Australian employee is workload, with estimates that average workers are now doing six to eight more hours a week than they were before the pandemic.

For managers who want to make sure their employees don’t feel overwhelmed, McEwan recommends learning how to set clear and reasonable expectations.

“The biggest lesson from the pandemic is that employees want to be seen as people… The role of managers is setting reasonable expectations and helping employees do their jobs more effectively.”

Top 10 Drivers of Employee Attraction and Attrition, Australia, 1Q 2023

RankDrivers of Attraction (change in rank)Drivers of Attrition (change in rank)
1Work-life balance (+1)Manager quality (nil)
2Location (-1)People management (+1)
3Compensation (+1)Work-life balance (+3)
4Respect (-1)Respect (-2)
5Vacation (nil)Compensation (-1)
6Stability (+1)Future career opportunity (+2)
7Manager quality (+4)Recognition (nil)
8Future career opportunity (+4)Coworker quality (+1)
9Coworker quality (-3)Location (-4)
10Ethics (-1)Ethics (+1)

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