Employee turnover rate at three-year low as workers brace for drop in their real wages

Tuesday, June 16, 2026

Australian employee turnover fell to its lowest level in three years, dropping from 15.2% to 13.5% over six months, while hiring intentions remain cautious and pay rise expectations lag behind inflation. This trend raises concerns about stagnant real wages and increased workplace stress, as employers focus more on support programs than addressing underlying job demands and management issues.

Australian employee turnover has reached its lowest point in three years, according to recent research from the Australian Human Resources Institute (AHRI), but the decline does not necessarily reflect increased job satisfaction. The turnover rate dropped by 11 percent over six months, from 15.2 percent in the December quarter of 2023 to 13.5 percent in the June quarter, marking a new low since the AHRI survey began earlier in the year.

Recruitment intentions also remain subdued, with only 61 percent of organisations planning to hire, the second-lowest level recorded by the survey. Meanwhile, redundancy intentions persist at a low 19 percent, as many employers adopt alternatives such as reskilling and retraining existing staff or reducing reliance on contractors.

Despite the lower turnover and cautious hiring, pay rise expectations for the coming year remain modest. The AHRI survey found average anticipated salary increases at 3.1 percent, down slightly from 3.3 percent last quarter. With the current inflation rate running at 4.2 percent, workers face the prospect of shrinking real wages unless inflation decreases significantly. AHRI chief executive Sarah McCann-Bartlett noted that concerns over inflation-driven wage increases adding to employers’ cost pressures have not yet materialised. She added that many employees could experience a further decline in real earnings, potentially creating challenges for employee engagement and consumer spending.

The AHRI report also highlighted ongoing issues related to psychosocial hazards in the workplace, which continue to be a critical focus for employers. While complaints and claims related to psychosocial risks have eased compared to early 2024, these issues remain significant. The most commonly reported risk is job demands, identified by 23 percent of organisations, followed by poor workplace relationships (22 percent), lack of role clarity (19 percent), and insufficient support (17 percent).

Complaints linked to remote or isolated work environments have decreased from 17 percent in early 2024 to 13 percent, a shift McCann-Bartlett interpreted as evidence of stabilisation in the hybrid work debate. However, she cautioned that with muted hiring activity and fewer contractors, job demands and workload pressures may intensify in the months ahead.

While the proportion of organisations reporting no psychosocial claims rose from 20 to 30 percent, significant gaps remain in addressing root causes. Employers tend to focus on monitoring risks and implementing employee support initiatives such as flexible working arrangements (33 percent) and work-life balance programs (32 percent). However, less emphasis appears to be placed on tackling underlying factors like workload, job design, and management capability, areas critical for long-term psychosocial hazard mitigation.