Interest rates are on the up, house prices are easing – will this entice workers to stick around?
With interest rates and inflation rising, combined with housing prices easing, the rush by Generation Y and Z to exit their jobs might be slowly rescinding. While everyone expected the Australian economy to keep rebounding after both border and work restrictions started easing late last year, it was foolhardy to think that interest rates would not start to climb after a decade of minimal activity.
“Traditionally when the economy takes a downturn, many employers start reducing headcount and there are less job vacancies,” Scott Stein, author of Leadership Hacks, said. “Because things get more challenging economically with the cost of living rising, many employees want to stay with their current employer because it gives them a sense of security. This will probably remain true for many of the older generations that have mortgages and financial obligations that a steady income helps with.
“The younger generations often have a different value set - and less financial obligation - and will be willing to try new things, which includes starting their own microbusinesses or side hustles to create the work and income that they desire. While a downturn may reduce the large number of people that are resigning, it still may result in some companies having to still fight for top talent.”
Depending on what macro or micro economic forecast you read, the effect of inflation is yet to peak. Some economists are predicting it will rise until the end of 2023, while others see a softer landing by the end of the year.
The inevitable fall in house prices will have many elder workers worried and keen to stay put in their job, but with many Generation Y and Z still yet to enter the mortgage market, they won’t be as perturbed. For some, it will present an opportunity to finally buy their first property.
They will still be looking around for new jobs that pay more and offer better progression opportunities.
“If leaders want to keep staff from resigning, they need to create cultures that attract and retain staff,” Stein added. “It is up to the leaders to create a culture that is constructive. This requires leaders to ensure that they lead in a way that inspires, motivates, challenges, and encourages their people to perform at a level that creates individual growth as well as the possibility for achievement.
“If you look at the research, and there is plenty of it, many staff have stated that they will not stay working for a company that is old school, forcing people to return to an office that is stuck in the past. People are putting a higher priority on their own well-being and want to work for employers that are doing something to provide a more positive work experience. Leaders need to create workplaces that are flexible and productive.”
The great resignation has been in effect for some time as evidenced by the Australian Bureau of Statistics (ABS) data. ABS research reveals job vacancies in February 2022 were 86% higher than in February 2020, prior to the start of the pandemic. This shows that the great resignation is currently happening and continuing.
“Many clients that I have worked with over the past 24 months have reported on the loss of staff and the challenge of fulfilling the vacant positions,” Stein said. “Many of the HR forums and group discussions also show that many companies are looking for staff due to the large amount of job vacancies.
“Many managers are quick to blame the younger generations as not being able to have the mindset or skills to stick with a job longer term. This is often where the comment that Generation Y and Generation Z are not committed or as resilient as other generations.
“Often this is not the full picture. What is different is that many of the younger generation will not stay with an employer if they believe that it does not have a supportive culture that will provide opportunities for them to grow.
“If a manager is unsupportive, disorganised, and dictator-like, the younger generations are very quick to reprioritise whether they should stay or not. If they have a boss or a job that is going to make their life miserable, they are not afraid to quit. This is very different to previous generations in that they were willing to put up with a ‘boss from hell’ because they wanted a job and felt that this was the norm.”
The future is uncertain from many viewpoints but offering stability and future opportunities in a workplace is a good place to start to enhance your employee retention.
