New Zealand employees are showing increasing signs of stress as interest rate hikes and recession fears start to impact career plans, according to the latest industry research from HR technology provider ELMO Software.
The quarterly ELMO Employee Sentiment Index, which surveyed more than 500 New Zealand employees, found that 82 per cent of employees are concerned about a recession in New Zealand with 73 per cent overall planning to stay with their current company in 2023.
The research revealed that recession fears are encouraging 34 per cent of employees to stay put in their jobs. A further 15 per cent said the prospect of a downturn is encouraging them to look for a new job internally, while 24 per cent of employees plan to stay put in their current job regardless of economic conditions.
Overall, half (48 per cent) of New Zealand employees believe that either rising interest rates or the prospect of a recession will affect their career plans in 2023.
At the same time, as interest rate hikes and recession fears start to bite, the research also found that New Zealand workers are showing increasing signs of stress:
23 per cent of workers say they are not working enough hours, up from 17 per cent a year ago
Taking annual leave continued to decrease with only a third (32 per cent) of the workforce taking annual leave in Q4 2022 compared to 41 per cent in Q3.
More than a third (34 per cent) of employees arrived at work feeling unwell in Q4 2022 compared to 19 per cent a year earlier.
Continuing a trend evident throughout 2022, NZ employees increasingly took on more responsibility at work – 29 per cent compared to 19 per cent a year earlier.
The belief that a worker’s role will be either automated or offshored in the next five years has increased to its highest level yet.
ELMO Software co-founder and CEO Danny Lessem says these findings should be a red flag to employers, clearly demonstrating increasing levels of stress among their employees during tough economic times.
“New Zealand has been ahead of other countries in hiking interest rates and now we’re seeing signs that economic stress is impacting employee behaviour.
“Compared to a year ago when COVID restrictions were still in place, employees are more likely to go to work despite feeling unwell. At the same time, cost of living pressures are leading to an increase in people saying they are not working enough hours.
“Now is an essential time for companies to be proactive in understanding and supporting their employees. I’d urge business leaders to find out how their employees are feeling through a wellbeing survey and to make sure they’re aware of the types of employee assistance programs available.”
Not surprisingly, Millennials – the generation most likely to be getting married, having children and buying a house – are showing the most signs of stress. While four out of five (82 per cent) New Zealand employees are worried about a domestic recession, Millennials are the most concerned (86 per cent; cf. Gen Z 74 per cent, Gen X 81 per cent, Baby Boomers 81 per cent).
More than half (52 per cent) of Millennials believe that economic conditions may lead them to search for a new job in 2023 as they are materially more concerned than other generations about the security of their job, their company and the industry they work in.
Millennials are also significantly more concerned than other generations that their role will be either automated (Millennials 29 per cent, Gen Z 10 per cent, Gen X 15 per cent and Baby Boomers 8 per cent) or offshored in the next five years (Millennials 23 per cent, Gen Z 12 per cent, Gen X 11 per cent and Baby Boomers 3 per cent).
But in a sign that New Zealand’s tight labour market may be offsetting fears in the short term, Millennials are most likely to quit their current job without another job to go to (35 per cent; c.f. Gen Z 22 per cent, Gen X 13 per cent, Baby Boomers 19 per cent).
In another short-term sign of confidence, the number of employees likely to ask for a pay rise or promotion in the coming year increased to more than half (53 per cent), up from 37 per cent a year earlier.
The youngest New Zealand workers were most confident about their chance of scoring a pay rise – with two thirds (67 per cent) of Gen Z and 58 per cent of Millennials likely to request an increase in 2023 compared to 50 per cent of Gen X and 37 per cent of Baby Boomers.
“This research highlights that individual priorities might be very different at this time,” says Danny.
“A one-size-fits-all approach to flexible working, salary and development opportunities is not the answer.
“At the same time, while the majority of employees are planning to ride out the economic storm with their current employer, it would be a mistake to think that they are adopting a passive approach to managing their career. While external career moves might be on hold for now, employees are indicating they plan to be more active in looking for promotions, pay rises and opportunities to grow within their existing company.
“For HR teams and people managers, this research emphasises the importance of regular performance and development conversations with your team members, ensuring salary benchmarking is up to date and succession plans are in place so that internal talent is not being overlooked when hiring for roles.
“While the focus of many companies over the past few years has been on hiring the talent they need, we think their attention should be shifting to better managing the talent they have.”
