How inflation is affecting retention in the workplace

We’ve all felt the knock-on effects of inflation – whether it’s getting yet another letter from your lender about a mortgage rate rise, or just noticing how much more you’re spending on day-to-day essentials.

But what about in the workplace? Does inflation impact your business and your employees? Absolutely, it does – and this is borne out in the research we’ve just conducted with leading research agency McCrindle.

Here’s what you need to be aware of as an employer – and what to do about it.

Three ways inflation affects workplace retention

1. Rising inflation can mean employees struggle to pay for rent, utility bills and just maintain their day-to-day standard of living
2. Your staff might start to a) negotiate a pay rise or b) look around for a job that pays more
3. You may start losing staff because you can’t afford competitive salaries or perks.

What the stats say

We know that inflation can have negative effects on workplace retention, but don’t panic – not everyone in your team is about to jump ship!

According to our research, the Australian and New Zealand workforce is in a state of flux right now – but here’s what we’re seeing:

• 38% of workers haven’t considered leaving their jobs at all
• 43% of employees have considered leaving their jobs but decided to stay
• 19% have considered and decided to leave their jobs.

This last group (the ‘decided leavers’) is made up of executive managers (27%), managers (20%), non-managing employees (18%) and directors (18%).

We’re also seeing more young people open to leaving for a better-paid job and even exploring considering alternative income streams to keep up with the rising cost of living.

What can you do as an employer to improve workplace retention?

The good news is, there’s lots you can do. And some things you might already be doing.

According to our research, workplaces are more likely to thrive when your workers:

• Have job security (important to 62% of those polled)
• Have good relationships with colleagues (important to 51%)
• Have a sense of purpose in their role (important to 50%).

You might also like to read this blog post about retaining employees and the kinds of perks that are important to today’s job-seekers.

Plus, if you have a lot of younger employees, a sure-fire way to keep them engaged and happy at work is to put opportunities for career progression and professional development in place. We know from our research that this is super important to 41-48% of Gen Z and 39-42% of Gen Y.

Final word on retention from our recruiters…

To mitigate high turnover in your organisation, it’s a good time to look at the salary packages and benefits you’re offering. Are they still competitive and in line with market rates? Can you improve on anything you’re offering candidates? Or maybe you can make the recruitment process smoother for applicants?

It’s also a great idea to talk to your employees and find out what motivates them. Offering flexibility in shifts or work arrangements is key in helping your staff manage their lives outside of work. Creating a happy, supportive workplace culture will make your team think twice about leaving – because they love coming to work!

And as we mentioned above, creating programs and opportunities for your staff to upskill and progress in their careers is also super important in the current climate.

Find out more about how you can stay ahead of the curve and make informed decisions about your business. Click here to download your copy of our 2023 Workforce Trends research.