Thanks to the knock-on effects of the covid pandemic, as well as rising inflation levels, businesses are now being faced with a new struggle in the form of ‘quiet quitting’.
Across Australia, workers are seeing a decline in real wages. While their workloads are increasing, companies are refusing to grow their pay accordingly, worried about the long term impacts on their profits.
But continuing down this path may be more damaging in the long run, negatively impacting the economy for all.
The quitting alternative
The slow-it-down movement of ‘quiet quitting’ is currently trending across social media. Particularly relevant for Millennials and Gen Z workers just breaking into their industries, this new form of protest can be seen as a rejection of hustle culture.
‘Quiet quitter’ is the label given to those who want to maintain their job, yet refuse to put in extra effort above the basic job description. Instead of committing to longer hours, unpaid overtime, or even just an enthusiastic dedication to the role, many employees are now filling out the bare minimum requirements to remain employed.
And this is all thanks to the effects of the pandemic. During lockdowns, many workers found themselves with increased workloads, more stress, and damaged mental health. However, they were being paid just as much as before.
With growing levels of inflation, employees are now also facing a change to their lifestyle. Under the same wages, they are able to afford less, leading to a cost of living crisis across the country. According to the Australian Treasurer, Jim Chalmers, the Consumer Price Index (CPI) will soon hit 7.5 percent, while wage growth has only increased 2.4 percent.
This change in the way workers view their work-life balance has prompted a quiet revolution, one which is now shaping the business landscape. Unsurprisingly, employees are pushing back against these new conditions. They fear that businesses are taking advantage of them, increasing their workload without increasing their pay to match.
While at first, this may seem like a small problem, this new worker’s climate is risking a labour force shrinkflation, with pay staying the same while employees provide fewer units of effort per dollar. This decline in ‘real’ wages has practical implications on the future of the labour market, if not addressed properly.
What can businesses do?
While an initial solution seems to be increasing worker’s pay, it’s not always realistic to expect companies to increase wages, especially when still feeling the effect of covid lockdowns themselves.
However, there are other alternatives. Companies could introduce incentives linked to performance, rewarding those staff members who go above and beyond, or create value in the workplace.
They can also listen to workers’ concerns, understanding the struggles they face to better support their employees.
It’s these small steps which prevent undermining long term profitability, and contribute to a more stable future for all.
Want to learn more about the impacts of inflation? Click here.