Australia on the brink of ‘The Great Resignation’ with 38% of Aussie workers looking for a new job, and the numbers could get higher - PwC ‘What Workers Want’ report

• Six in 10 people who have left an organisation in the past year are looking to leave their current employer in the next 12 months
• Australian employees rank pay and wellbeing as the top drivers attracting them to work for organisations
• Almost half of Australian employers have no intention of updating their employee value proposition to attract talent
• 85% of workers experienced mental health challenges during the pandemic and more than one-third consider their employer the main source of mental health support
• A quarter of workers said the reasons they join an organisation and the reasons they stay are not always the same

Australia is at crunch point and on the precipice of The Great Resignation - a period where workers will leave organisations at both scale and pace. While large numbers of workers on the move would historically be a welcome and much anticipated signal of a healthy economy, this development is likely to be a huge concern for Australian businesses in light of a high number of unfilled vacancies, constraints to skilled migration, and nearly three quarters (73%) of senior leaders expressing difficulties in attracting talent during the pandemic.

PwC Australia conducted a survey of more than 1,800 Australians to help employers understand what workers want as labour market sentiment changes - this is the first Australian study looking into The Great Resignation and what workers want of this scale. The report, What Workers Want: How to win the war on talent, found that 38% of Australian workers are looking to leave their current employer during the next 12 months and 61% who have left an organisation in the past year are looking to leave their current employer in the next 12 months.

In contrast, 55% of Australian workers said they expect to stay with their employer for at least five more years - meaning people are either going to leave in the near future or stay for the long term. Findings also showed that 93% of Australian workers feel trusted and 77% are engaged in their role, which are core to hybrid working effectiveness. This may reassure employers, especially coming off the back of a particularly challenging period for employers and employees alike, however this does not necessarily breed loyalty.

Dr Ben Hamer, Future of Work Lead at PwC Australia, said, “Australia is on the precipice of The Great Resignation. This phenomenon will be in full swing by March 2022 driven by market stability, increased consumer confidence, the likely softening of interstate borders, and the usual post-summer holiday recruitment activity.

“The balance of power has shifted from the employer to the employee. Competition for talent will intensify and those that fail to adapt will take a big hit. To protect themselves from the full force of The Great Resignation, and attract the right skills, organisations must identify what their workers really want and reimagine their employee value proposition to deliver on these expectations.”

What workers want ... and what leaders think they want

PwC developed an employee preference index with seven employee value proposition (EVP) levers to help leaders organise their thinking and drive effective change:

1. Remuneration and rewards
2. Workplaces and spaces
3. Ways of working
4. Career development
5. Wellbeing
6. Experience
7. Brand

Survey participants were asked to rank their preferences based on what they value most from an employer. Remuneration and rewards was ranked the highest at 25% with wellbeing then experience rounding out the top three (22% and 16% respectively). Continuing down in order of preference were ways of working, career development and workspaces and places, with brand ranked last on the list. However, there is a sizable gap between what workers want and what senior leaders think their people want.

“Where there are areas of notable discrepancy, it might be that top executives look at initiatives like on-the-job learning, access to coaching and mentoring, and their commitment to the environment as key attraction levers, when they are actually baseline expectations rather than differentiators.

“This disconnect between leaders' perceptions and workers preferences can have a significant financial impact for employers. Misdirection of resources and funding towards benefits that won’t deliver a return on investment is one thing. But worse is the impact on the organisation's ability to retain and attract top talent in a competitive labour market, as this will get in the way of the post-pandemic recovery and growth agenda that many organisations are driving” said Dr Hamer.

An EVP is more than just a buzzword - it is the balance of tangible and intangible benefits, representing why someone would choose to work at one organisation over another. It also changes over an employee’s tenure at an organisation too - a quarter (25%) of workers said the reasons they join an organisation and the reasons they stay are not always the same. This may include someone joining for the pay but staying because of the culture, or joining because of a promotion but staying because of their networks and relationships.

The end of the one-size-fits-all approach

When it comes to what an attractive EVP looks like, the research showed commonalities across cohorts. Digging deeper into the data and looking beyond the seven top-level levers, there were three clear priorities that workers want across all cohorts, ranked in order:

1. Working alongside good co-workers
2. Work-life balance
3. Pay

There were also clear differences between and across cohorts. Consequently, the optimal EVP focuses on the three priorities - beyond that, it gets nuanced based on the dominant demographic segments within the workforce. The findings showed men are quite dispersed in their preferences yet they value more traditional incentives such as lifestyle subsidies and travel opportunities, while women are much more consistent in their demand for the right culture, wellbeing support and flexible ways of working. Gen Z ranked work-life balance as the top priority, while Gen X wanted to work alongside good co-workers, and Baby Boomers value superannuation and the location of the office.

Dr Hamer said that EVP is not the same thing to all people.

“Workers value different things. This may be influenced by their culture and upbringing, their stage of life, caring commitments, financial liabilities, socioeconomic status, and a whole range of other factors. Because of this, the EVP for a given employee does not stay the same over the course of their employment either. As they get older or have a change in circumstance, like buying a house or having a child, their values, needs, and employment expectations shift. And so should their EVP.”

Striking the right balance

When it comes to the EVP, remuneration and reward, which includes fixed pay along with other financial incentives such as bonuses and lifestyle benefits, came in at number one. However, more surprising was the rise of wellbeing. As people experience blurred lines between work and home, stress from the pandemic and impact on job security, as well as increased instances of loneliness and isolation, the survey found 85% of workers reported mental health challenges in the last 18-months.

Australian workers clearly value remuneration and wellbeing, however earning a bonus or a promotion often means working longer hours, or with elevated intensity, to stand out from the crowd. For organisations, the findings indicated the importance of providing employees with choice and control. This also means stewarding a culture and driving behaviours and ways of working that allow remuneration and wellbeing to coexist in a way that works for the employee.

Dr Hamer continued, “We know that money talks. The remuneration lever has been somewhat lost in the future of work narrative given the noise from other adjacent topics. It’s time to remind ourselves though of the importance of remuneration and the way in which it is, and always will be, a strong and tangible marker of perceived value and worth. It’s important that remuneration is market-competitive and justifiable.

“Employees are now expecting more from their employer. They’re expecting financial incentives, ways-of-working, and leaders that prioritise wellbeing. The benefit is a $2.30 return in productivity for every $1 employers invest in wellbeing. The interesting challenge that’s playing out is that while workers clearly value remuneration and wellbeing, they can sometimes be in conflict because in order to get paid more and have a greater likelihood of receiving a bonus, people feel like they need to work more.”

This is a unique point in time for employers and employees alike. It represents a massive opportunity for those that redesign their EVP to position themselves as an employer of choice and attract top talent. Organisations failing to do so will compromise their ability to drive post-pandemic recovery and growth. The time to act is now.

“Change is happening at the fastest rate in human history. It is also the slowest that we will experience for the rest of our lives. And nothing is changing more than work. The disruption we are seeing in the workplace is not simply a ‘COVID-19 thing’. We are not going back to the way things were. Because the pandemic was not the cause for this disruption. Rather, it just brought to the fore the changes that were already happening and accelerated them,” concluded Dr Hamer.

To view the What Workers Want: How to win the war on talent report, click here.