What’s the relationship between anxiety and the talent economy?
A recent poll within our talent community revealed that more than half of employees were feeling anxious about their jobs.
Earlier this year I started writing down newspaper headlines. In an election year, I thought it might be an interesting exercise.
Here’s a snippet of what I collected between March & May:
“NZ flirting with recession amid sharp economic slowdown” – 14 March
Then one month later:
“NZ tipped for ‘deeper’ recession in 2023” – 18 April
Then exactly one month after that:
“Treasury Optimistic over recession risk in budget 2023” – 18 April
Read that again. What a rollercoaster!
Like most Aucklanders were after the floods and cyclone earlier this year, Kiwi’s nerves are understandably frazzled.
And it’s confirmed in the data. A recent poll within our talent community revealed that more than half were feeling anxious about their jobs.
Well, because recessions drive redundancies.
Redundancies mean uncertain income and;
Uncertainty is a key driver of anxiety.
This year, a large number of New Zealanders will roll off their current fixed term mortgage rates – with many facing the prospect of a 4 or 5% rise. They’re anxious they won’t be able to afford their repayments.
But what impact does anxiety – particularly financial or recession anxiety – have on the talent market?
People are psychologically preparing for what might happen, and without realising it putting additional pressure on a tight labour market – which is making it infinitely more difficult for employers.
While six months ago, they might have jumped ship for a pay bump; the perception is that jump now comes with more risk.
As a ‘new employee’, they fear a “last in, first out” situation in the case of restructuring and downsizing. While sticking with their current employer may see their pay stagnate, it feels more secure because they’ve had the chance to prove their value.
With a shortage of skilled talent and a trickle of our top minds chasing big money offshore (see my blog last month here), that anxiety is causing trouble for employers here in NZ.
On the upside, this phenomenon may also have some other implications – particularly those wanting their staff back in the office. While 6 months ago the mention of ‘coming back to the office’ was met with a small rebellion, employees keen to keep their roles should a restructure happen may choose to work more in the office. Out of sight, out of mind anyone?
Of course, not everyone is sitting tight though. The cost of living crisis may force people into taking risks and seeking something new.
In April, ASB predicted that households would need to spend an extra $150 per week to keep up with inflation. How that prediction stacks up in June is hard to tell but either way, there’s no doubt life is expensive right now. Those already feeling the pinch may be more inclined to move companies for better pay and we may see that happen more sharply towards the end of the year.
All in all, it’s a tricky one to summarise.
Likely, we will maintain a talent short market throughout 2023, although this won’t be felt everywhere. Among other things, it will depend on an individual’s financial situation, industry and their stomach for risk.
Anxiety looks to be a theme in 2023.
Control what you can, plan for the future, but remember that our worries tend to be bigger than our realities.