Hays has released its FY26/27 Salary Guide for Australia and New Zealand, which found that 50% of Australian workers feel underpaid.
The findings point to a gap between confidence in job security and broader workplace satisfaction. While 66% of Australian workers said they felt confident about their job security over the next year, only 53% were satisfied in their roles and 42% were satisfied with their salary.
The research drew on responses from more than 7,000 hiring managers and professionals across Australia and New Zealand, including 5,223 in Australia. The results suggest employees are staying put despite growing frustration over pay and progression.
Average salary increases were about 4%, broadly in line with inflation. As a result, many workers saw little real improvement, particularly as cost-of-living pressures continued to shape pay reviews.
Among employees, 42% said they had received little to no meaningful increase over the past year. Only 12% reported pay rises of between 6% and 10%.
Lower-paid workers reported the weakest wage growth. The survey found that 62% of professionals earning less than AUD $79,000 had seen little to no meaningful salary growth, compared with 36% of those earning above AUD $80,000.
That split suggests pay pressures are hitting lower-income households harder. It also points to a widening gap in earnings growth across the workforce at a time when many employers remain cautious on pay.
Employers expect average pay rates to rise by 3.8% over the next 12 months, slightly below the previous year. Sectors including legal, consulting and strategy, and accounting and finance expect stronger salary growth than average, while retail, hospitality and tourism, education, and the public sector are more downbeat.
Retention risk
Job movement remained subdued. Just 20% of professionals said they had changed employers in the past 12 months, and 38% said they planned no change to their career path or goals over the coming year.
Even so, low mobility should not be read as a sign of contentment. Among those considering a move, 36% cited a lack of future opportunities and 33% pointed to unclear promotion pathways.
Employees without defined progression routes reported lower satisfaction and were more likely to be actively seeking a new job. Workers who had not received a salary increase also showed lower satisfaction and higher job-seeking activity.
"Employers shouldn't confuse low mobility with low dissatisfaction. Only 1 in 5 changed jobs last year, yet 1 in 3 say there's no clear promotion structure, and pay growth is only just tracking inflation. The conditions for a retention problem are building underneath stable turnover numbers," said Matthew Dickason, chief executive officer of Hays APAC.
"Workers are staying put out of caution, not contentment. Progression pathways remain unclear, pay is largely stagnant in real terms, and underlying dissatisfaction is building quietly.
"This is a crucial moment for employers to pause, understand the concerns of their teams, and address these underlying issues before they translate into future turnover."
Why staff stay
The survey found retention was shaped by factors beyond salary alone. The most common reasons for staying in a current role were relationships with colleagues and managers, cited by 42%; stable income and benefits, also 42%; and job security, at 34%.
By contrast, the leading reasons for leaving were salary and benefits, at 43%; lack of future opportunities, at 36%; and low pay, at 30%. The results suggest that while pay remains central, workplace relationships and perceived stability still carry weight in decisions to stay.
Flexible working also appears to have shifted from a differentiator to a standard expectation. While 70% of employees described it as very or extremely important, only 30% named it as a reason to stay and 16% as a reason to leave.
More than half of professionals said they already had flexible working arrangements, and 41% said they worked from home two days a week. A third said they would prefer to work from home three days a week.
Outlook mixed
Views on the wider economy and employment prospects over the next two to five years were divided. Among professionals, 32% were optimistic, 32% were not optimistic, and 37% were neutral.
Employers were slightly more cautious, with 28% optimistic, 32% not optimistic, and a growing share neutral. Optimism among professionals had improved from the previous year, while employer confidence had softened.
The survey also highlighted differences by age. Workers aged 29 and below and those over 50 were more likely to say they were optimistic than professionals aged 30 to 49.
Skills shortages remained widespread across the labour market. More than 82% of employers said they faced shortages, while the use of artificial intelligence at work was running ahead of formal training. Some 60% of professionals said they used AI regularly, despite 78% saying they had received no formal training.
On career decisions, Dickason said workers should be clear about the source of their dissatisfaction before changing jobs. "If you're feeling dissatisfied, work out what's actually driving it before you make a move," he said.
"Sometimes it's salary. Often, it's progression, role clarity, or whether you can see a future where you are. These are different challenges with different solutions, and critical factors to weigh up when considering your next move.
"Taking the time to consider what you value most in your job can help you make a more informed decision about whether to reset in your current role or move on."