BRISBANE, AUSTRALIA — May 2024: Global insurance, risk management and consulting firm, Gallagher, has released its annual Australian Workforce Trends Report, revealing a focus back on salaries and perks to attract and retain top talent amid mounting cost-of-living pressures for working Australians.
Flexible work arrangements, professional training and career development programs continue to be the must-haves for employees to improve their workplace wellbeing.
Now in its third year, the Workplace Wellbeing Index is a barometer for how Australian employers are tracking in providing positive, safe, and effective workplaces for employees. The report is based on the insights of 2,499 full-time, part-time and casual employees across Australia making it the largest report of its kind nationally.
"While last year's report reflected a battle to attract and retain skilled workers, this year saw a slight softening of the labour market driven by increasing immigration and declining job vacancies," said Dr. Scott Krebs, Head of HR and People Experience Consulting at Gallagher.
"However, the pressure for organisations to provide a compelling employee-value-proposition and duty of care around staff wellbeing remained critical. Our research reveals that low wellbeing continues to present a growing risk that impacts the bottom-line and presents a significant opportunity for employers to differentiate their offerings by striking the right balance between remuneration and other benefits."
While the research demonstrated a slight improvement in workplace wellbeing from 2023 (of 5 percentage points, at 53%), it found that nearly two-thirds of employees (63%) have continued to work despite feeling they should have taken time off (referred to as 'presenteeism'), a figure similar to last year (67%).
The data also confirms that over half of employees experiencing low levels of wellbeing reported dissatisfaction with their workload and their organisation's approach to workplace bullying and harassment.
The 2024 Index reveals that the most significant deficits between 'importance' and 'satisfaction' are in base salary (-25%), incentives (-24%) and employee benefits (-18%). Additionally, when asked to rank the most important consideration when selecting an employer, 'remuneration, reward and benefits' remained the top priority, except for the training and education sector, where employees are more concerned with finding meaningful work. Unlike previous years, base salary has also emerged in this study as a key driver of intentions to stay.
"While financial and cost-of-living pressures have impacted Australians in general, younger workers who have never witnessed a high inflation and high-rate environment before, are not well placed to manage that," said Dr. Krebs.
"Employers must proactively respond to these concerns by reviewing their 'remuneration, rewards, and benefits' to remain competitive in attracting new talent, whilst not leaving the existing workforce behind," he added.
Three years after the lifting of pandemic lockdown measures, the report confirms that the appetite and expectation of flexible and hybrid working has not diminished. No matter the age or industry, flexible working arrangements confirm its #1 spot as a must-have benefit for 35+ year-olds, and #2 spot for 18—34-year-olds (just after professional training and development).
On the other hand, employers are fighting for control in a post-pandemic world, with some sectors pushing staff to return to the office, with some even linking this to career progress and promotion.
"When designing a benefits program, it is vital to consider people's life stages and other key demographic factors, as staff are likely to have different challenges and needs depending on their stage of life," said Dr. Krebs.
"With flexibility confirming its top spot as the most important benefit to employees, it is critical for leaders to trust their people and empower them with the right resources and environments to thrive."
While many organisations have settled on a 3:2 approach (three days in the office, two from home), workers would prefer to flip this to a 2:3 approach instead — creating a disconnect and calling for the need to find a middle ground requiring higher engagement and coordination between employers and employees.
"For organisations looking to introduce new restrictions to their flexible working options, this may come at the cost of retaining employees," he warned.
According to Dr Krebs, failing to take responsibility for people's wellbeing can be costly for organisations in the long run. A range of hidden costs can arise from low wellbeing in the form of sickness and injury claims, lower productivity and engagement, and lower retention and replacement costs.
The report found that two-thirds of workers with low wellbeing report having experienced a mental health-related injury in the last 12 months, compared to 5% of people with high wellbeing.
While employees with low wellbeing are at a higher risk of experiencing both mental health-related and physical injuries at work, mental health conditions also come with a significant personal impact as well as a financial cost for organisations.
"This makes it even more crucial for employers to provide a safe environment for their staff to communicate mental health problems to their superiors without being stigmatised," Krebs added.
In 2020-2021, the median compensation paid for mental health conditions was $58,615 per serious claim, compared to $15,743 per serious claim for all injuries and diseases. The median time lost due to serious mental health claims was 34.2 working weeks, compared to 8 working weeks per serious claim for all injuries and diseases. The return-to-work journey is also more complicated when it comes to mental versus physical health. In 2021, the return-to-work rate for people with mental health condition claims was 79.1%, compared to 91.6% for all injuries.
Poor wellbeing also impacts retention rates, with 2.5x more people with low wellbeing resigning in the last 12 months compared to individuals with high wellbeing.
Dr. Krebs believes that shifting the dial on wellbeing means shifting the dial on business performance outcomes.
"Where employees are confident in action being taken as a result of feedback, our research reveals that employees reported 2.7 times higher engagement at work, 1.3 times more willingness to go above and beyond, and 1.7 times stronger intentions to stay.
Positively, the percentage of employees who have had the opportunity to provide feedback on their wellbeing at work, stands at 71% compared to 67% in 2023, indicating that more workers are being invited to contribute to these vital discussions.
That said, just over 50% of employees reported feeling confident action would be taken after providing feedback, indicating a clear area for improvement for employers.
Consulting with your workforce is essential to creating a safe workplace that supports employee wellbeing. Open communication about potential risks and concerns can assist employers and employees in finding solutions together.
This cooperation helps build more trusting relationships, a greater understanding and commitment to decisions and ensures a safer workplace," he concluded.
How does your organisation compare to the rest of Australia? Download Gallagher's 2024 Workforce Trends Report: Workplace Wellbeing Index to take the first proactive step to enhancing the wellbeing of your employees.
Jeremy Steven, Honner
0432 078 078
Arthur J. Gallagher & Co. (NYSE:AJG), a global consulting, insurance brokerage and risk management services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.
The data and insights highlighted in the Workplace Trends Report were gathered from December 2023 to January 2024 with 2,499 employees from across Australia contributing to the results. The census representative sample included an even split on several demographics and included full-time, part-time and casual employees.
The Index provides a comprehensive snapshot of what is driving attraction and retention of employees and how organisation can compete in the current challenging market.
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