Inflation erodes employee confidence, but bosses upbeat
Confidence about the economy soars among employers while workers struggle with cost-of-living pressures, survey finds.
Employers have much greater confidence in the economy and their company’s growth prospects than workers, research by recruiter Robert Half finds.
It showed nine out of 10 bosses were optimistic their business would expand this year against just seven out of 10 employees who felt the same.
The lower level of worker optimism was driven by a lack of financial resources (33 per cent) and reduced business opportunities (40 per cent), but especially by concerns that the economy would take a turn for the worse (74 per cent).
Robert Half director Nicole Gorton said inflation strongly influenced employee sentiment and the result was still an improvement on previous surveys.
“Continued financial stresses placed upon household budgets caused by recent mortgage interest rate rises and the rising cost of living may be behind why workers overwhelmingly see a different economic situation than their employers and therefore hold less growth confidence than them,” she said.
“Despite this, there is still an overall boost in employee confidence regarding company growth that has been observed compared to the preceding 12 months, primarily attributed to increasing demand for products and services, increased financial resources and a slight softening in the volatile economic situation.”
The research found a generational divide, with greater optimism among workers from Gen Z (80 per cent) and Millennials (82 per cent) than their counterparts among Gen X (76 per cent) and Baby Boomers (65 per cent).
“While the quarterly average number of redundancies that occurred was lower in 2023 compared to pre-Covid, the continued squeeze on company profit margins may be unnerving older workers, particularly as they have experienced more economically challenging times during their working lifetimes than younger workers,” Ms Gorton said.
“However, as the national unemployment rate flatlines and interest rate rises are put on hold, Gen Z and Millennial employees may be more confident that better times lie ahead.”
Overall, only 72 per cent of workers felt the same this year compared to last while 89 per cent of employers believed business conditions were on the up.
Employers cited increased financial resources (36 per cent), an improving economic situation (38 per cent), rising demand (42 per cent) and expanding opportunities (44 per cent) as the main reasons for their optimism.
“From a business leader’s perspective, increasingly positive sentiment and encouraging employment numbers are early indicators that 2024 is going to be a year of recovery and growth, which explains their increased confidence in their company’s growth,” Ms Gorton said.
“Companies are transitioning from survival mode to proactive mode.”
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