A recent survey conducted by Nib Insurance and the Employers and Manufacturers Association (EMA) has uncovered a troubling trend: 44% of Kiwi employees now report feeling anxious about their job security, a significant increase from 33% in 2022. This rise in anxiety is largely attributed to the economic challenges currently confronting Aotearoa, including rising inflation, corporate restructuring, and redundancies.
Amplifying feelings of job insecurity can be detrimental to one’s mental health, making employees feel more anxious and stressed than productive. The main question is what Kiwi employers can do to create a safe space for employees while inflation rages on?
Financial Strain and Mental Health Impact
Financial stress due to inflation is the main reason causing job insecurity, according to Craig Renney, an economist for the New Zealand Council of Trade Unions (NZCTU); two-thirds of Kiwi workers are struggling to meet daily expenses.
The financial burden is exacerbated by stagnant wage growth, while a recent survey from Robert Half stated nearly 50% of Kiwi employees are contemplating a second job, primarily to cope with rising living costs. The mental toll is concerning, with 39% of workers reporting that these financial and job security concerns have impacted their mental health.
Inflation and the Cost of Living Crisis
Inflation has been a critical factor intensifying these worries. Workers in major cities like Auckland and Wellington are facing rising rents and soaring prices for essentials such as groceries and utilities.
The survey found that many are seeking additional employment, while businesses dealing with their own financial challenges are often unable to provide pay increases. If the consequences of inflation remain unsolved, it creates a cycle of stress, with employees under heightened financial pressure while employers are managing their own economic constraints.
The Exodus of Kiwi Talent
It doesn’t help that in the middle of an inflation there is a talent drain currently happening in New Zealand, with a net migration loss of 52,500 people over the past year, adding another layer of strain to the labour market. As skilled workers leave for opportunities abroad, particularly in Australia, those who remain are shouldering heavier workloads. Employers are finding it difficult to fill critical roles, increasing pressure on employees and further contributing to job insecurity.
How Kiwi Employers Are Responding
In response, some employers are taking proactive steps to support their workforce. The EMA reports an increasing number of businesses prioritising on mental health support, flexible working conditions, and regular check-ins to monitor employee wellbeing.
Upskilling initiatives and competitive wages are also becoming essential strategies as businesses attempt to retain talent and alleviate some of the financial pressure on workers.
Addressing the Challenge
For Kiwi business leaders, addressing job insecurity requires a multifaceted approach that goes beyond simply offering pay increases. While salary adjustments can be beneficial for employees struggling financially especially given that a Bankate survey found 60% of workers feel their incomes haven’t kept pace with inflation, it’s important to recognise that job security remains a critical concern.
According to a survey by Monster.com, 25% of respondents prioritise job security over pay increases, and an additional 45% consider both factors equally important. This suggests that a comprehensive strategy that balances competitive compensation with a commitment to job stability will be most effective in supporting employees and fostering a positive work environment.
Employers are encouraged to adopt employee-centric strategies that include providing flexible work arrangements, since according to studies, 91% of Kiwis prefer to work in a hybrid setup, enhancing mental health support due to the increasing mental health toll that inflation can bring.
When companies reprioritise, they can help foster a secure and supportive environment, mitigating the risk of burnout and turnover, ultimately enhancing both morale and productivity.
One way for employees to show their support is by opening healthy dialogues in the workplace about job security and providing the necessary support systems needed to weather the storm. Employers or managers should show their empathy and sensitivity to what is happening outside of the workplace.
It would be best for leaders or managers to acknowledge the impact of inflation, and be transparent about how it is affecting the business whether positively or negatively for themselves as leaders and for the workforce, rather than avoiding discussion altogether. It is also crucial for employees to advocate for their mental health and welfare, as this can boost morale.
According to Mental Health America and other organisations, there’s an increase of 25% in employee engagement in organisations that prioritise mental health, which highlights how supportive workplace environments can lead to higher motivation and commitment among employees.
Conclusion
There are numerous ways New Zealand business leaders can create a sustainable and safe space for their employees to at least calm their fears of losing their jobs amid inflation, given that 44% of employees fear for their jobs, up from 33% in 2022.
There are many factors contributing to employees’ feelings of job insecurity due to financial pressure from inflation, stagnant wage growth, and rising living costs, which drive nearly half of Kiwi workers to consider second jobs.
At the same time, the emigration of skilled talent is increasing workloads for those who remain, intensifying stress and uncertainty. For business leaders, the solution lies in adopting proactive strategies: reassessing compensation, prioritising mental health support, offering flexible work conditions, and fostering skill development.
As a Kiwi business leader, it is important to be part of the solution to these problems. Companies can stabilise their workforce, improve retention, and create a more resilient, productive environment if they adapt and change not just to survive.