As 2024 draws to a close, Australian workers are reflecting on a year of rising pressures and evolving priorities, with a cautious but optimistic outlook for 2025. New insights from people2people recruitment highlight key trends in workplace stress, holiday plans, and changing expectations around pay and flexibility.

Stress Levels Persist, Younger Workers Feel the Heat

The close of 2024 finds 68% of Australian workers feeling more stressed than at the start of the year, a modest rise from 65% in 2023. Baby Boomers report lower stress levels than their younger counterparts, Millennials and Gen Zs, who continue to bear the brunt of workplace and financial pressures.

Erin Devlin, VIC Managing Director at people2people recruitment, says, “Stress continues to be a defining feature of today’s workplace, especially for younger generations. The financial pressures faced by Millennials and Gen Zs, coupled with the challenges of early and mid-career development, are contributing to these elevated stress levels. Employers should take proactive steps to ease these burdens by offering robust mental health initiatives, flexible working arrangements, and resources like mindfulness workshops or financial counselling.”

Holiday Plans Reflect Cost-of-Living Concerns

Australians’ holiday plans for summer 2024-25 highlight the ongoing impact of financial pressures:

• Staycations gain traction: 61% of Australians are planning to holiday at home this summer, an increase from 57% last Christmas. Over 70% of Baby Boomers are opting for staycations, while Millennials and Gen Zs remain divided between staying local and traveling.
• Annual leave on hold: Nearly half (45%) of Australian workers are saving their annual leave this Christmas due to rising costs, compared to 41% last year.

Erin Devlin says, “The financial pinch is reshaping how Australians take time off. For Baby Boomers, staying local is a practical choice. Millennials and Gen Zs, however, are still finding ways to prioritise experiences, even if it means traveling on a budget. Employers can help by encouraging employees to use their annual leave, offering flexibility in holiday scheduling, and promoting initiatives like wellness days or subsidised team retreats to combat burnout and financial stress.”

 Financial Confidence on the Rise, but Gaps Remain

While economic pressures are easing slightly, the results paint a mixed picture:

• Confidence is improving, with a 14% drop in workers making lifestyle changes due to the cost-of-living crisis.
• Overall financial concern has decreased from 64% in 2023 to 53% in 2024.
• However, Gen Xs remain the most financially anxious, with over half reporting increased worry heading into 2025.

Erin Devlin says, “The recovery in financial confidence is encouraging, but the heightened concerns among Gen X highlight a gap employers need to address. This generation often faces the dual pressures of career advancement and family responsibilities. Employers should consider offering targeted support, such as cost-of-living adjustments, financial planning workshops, and salary reviews tailored to the needs of this demographic.”

Workplace Priorities Shift: Pay Takes the Lead

2024 marks a significant pivot in workplace expectations, with pay increases overtaking flexibility as the most desired workplace benefit:

• 65% of workers now prioritise a 5% pay increase, compared to 35% who would prefer more flexibility. This is a reversal from 2023, when 59% of workers valued flexibility over pay.
• Gen Zs and Millennials remain the most vocal about compensation, with more than 30% expecting a salary increase of over 10% to return to the office full-time.

Devlin emphasises the need for employers to adapt to these changing priorities, “The shift toward prioritising pay reflects a broader recognition of financial security as a foundation for workplace satisfaction. For Millennials and Gen Zs, higher salaries signal opportunity and reward in a competitive job market. Employers must adapt by conducting market-aligned salary reviews, maintaining transparency in compensation discussions, and offering creative perks that complement pay, such as career development programs or performance bonuses.”

Preparing for 2025: Tips for Employers

• Prioritise competitive salaries: Conduct regular salary reviews to ensure alignment with market expectations and address the growing focus on financial security. Consider non-financial benefits including work flexibility in instances where you can’t afford to provide the salary increase the employee deserves.
• Support mental health: Introduce mental health initiatives, wellness days, and mindfulness programs to address workplace stress.
• Encourage meaningful breaks: Promote the use of annual leave and offer flexibility in holiday scheduling to combat burnout and help employees recharge.
• Bridge financial concerns: Provide financial education workshops and consider cost-of-living adjustments to ease economic pressures on employees.

As Australian businesses prepare to close out 2024 and step into the new year, understanding the evolving needs of the workforce will be essential. By taking proactive measures, employers can foster a productive and engaged team ready to tackle the opportunities of 2025.