New research from ELMO Software indicates that 45% of Australian employees, or approximately 5.76 million workers, believe their salaries are failing to keep up with the cost of living, as concerns about economic security and workplace wellbeing intensify.
The ELMO Employee Sentiment Index collected responses from more than 1,000 Australian employees between January and March 2025, examining workforce sentiment around job security, financial pressure, and broader economic uncertainty.
The survey reveals significant financial strain, with one in eight employees (12%) stating they are "nowhere near" earning enough to cover their family's financial needs. While over half (55%) say they manage to earn enough, the majority of that group (42%) admit they are only just getting by.
Confidence in the economy has also declined. Just one in three respondents (33%) feel the Australian economy is secure, a considerable decrease from 53% in the previous quarter.
Anxiety over job security is rising, with 43% of employees now worried about their roles being made redundant—an increase from 28% last quarter. The proportion of workers stating they feel compelled to work harder or longer hours to protect their jobs has grown to 48% from 37%, indicating widespread unease about job retention.
Rates of burnout among employees have risen sharply, with 43% reporting feeling burnt out—up 48% compared to the last quarter. The data also shows a rise in presenteeism, with 36% having worked while unwell in the past three months (up from 28%). Additionally, fewer employees are taking annual leave (down to 29% from 33%), and employee assistance programme usage has doubled to 6%.
Joseph Lyons, CEO of ELMO Software, commented on these findings: "Job insecurity is rising – not necessarily because of what's happening inside organisations, but because of the uncertainty people are feeling more broadly. When employees feel financially stretched, it often shows up in their wellbeing, their energy, and ultimately their performance at work. It's a challenge people leaders can't afford to ignore."
The survey also highlights that despite the challenging economic climate, 12% of workers have received a promotion, while 27% have taken on additional responsibilities, demonstrating that career progression is still occurring for some.
On expectations of future earnings, seven in ten employees anticipate a pay rise in the coming year, but expect an average increase of just 4%. Many believe this will not keep pace with rising living costs. Among those not expecting a wage increase, reasons cited include not intending to ask for one (35%), perceived company financial constraints (21%), or unfavourable external economic conditions (21%).
There is a noted disparity between what workers think should influence pay decisions and what they believe actually drives them within their organisations. While 34% say individual performance ought to guide pay, only 22% believe their employers agree, with many perceiving company profitability (27%) as the dominant factor in pay reviews.
ELMO's HR Industry Benchmark Report confirms that the most common remuneration approach in Australia combines individual performance and market rates (31%), yet employees' perceptions often differ from official policies.
Joseph Lyons addressed this disconnect, stating: "This research highlights a growing disconnect between employee expectations and the realities of pay. That disconnect between effort and reward can have real implications for engagement, retention, and productivity."
He added: "In uncertain times, workforce data becomes even more critical. Leaders who understand how their people are feeling – and why – are the ones best equipped to respond with empathy and impact."
When asked what benefits matter most beyond pay, 60% of employees rated flexible work arrangements highest, followed by performance bonuses (56%), increased super contributions (50%), professional development opportunities (44%), health insurance (42%), and more leave (37%).
Lyons highlighted the long-term importance of strategic investment by employers, saying: "Short-term economic pressures are real, but they shouldn't come at the cost of long-term strategy. Organisations that invest in flexibility, development, and fair pay now will be better positioned to retain talent and grow sustainably."
The ELMO HR Industry Benchmark Report notes that 66% of Australian HR professionals anticipate changes in workplace policy, with nearly half (49%) expecting movement toward more hybrid work models. Conversely, only 14% plan to return to full-time office attendance requirements.
The findings are based on nationally representative responses from employees aged 18–64, excluding independent contractors, and weighted in line with Australian Bureau of Statistics data.
