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Job Mobility Declining in Australia

Wage gains are about 9% higher among workers who switch jobs, according to research from e61 Institute.

By Maggie Mancini

Job mobility in Australia has declined over the past three decades despite a slight uptick following the COVID-19 pandemic, according to recent research from e61 Institute.  

Wage gains are about 9% higher among employees who switch jobs than for those who don’t, representing an annual pay raise of $5,700 more than the average worker who doesn’t switch jobs. Younger workers and lower-paid employees are more likely to switch jobs than their older and higher-earning counterparts, the research finds.  

Workers under the age of 34 benefit the most from changing jobs, while the youngest workers (those under 21-years-old) gain a 30% wage increase relative to those who remain in their jobs. This is likely driven by younger workers being more likely than older workers to move to more productive organisations in search of higher wages. The average older worker, in contrast, often switches to a lower-paying job due to lifestyle preferences, the report finds.  

The report examines some recent policy changes to the industrial relations system that are meant to boost wages and boost talent retention, though the research indicates that job-switchers receive larger wage increases than those who remain in their jobs for longer periods of time. Job-switching, the report finds, is also associated with better matches between worker skills and job requirements, which can help improve mental health.  

The report recommends that policymakers limit the spread and applicability of non-compete clauses in employment contracts, particularly for lower wage workers, to improve job mobility. Further, the report recommends reforming occupational licensing to remove barriers for migrants, investing in active labour market policies, improving the housing market, and improving flexibility in pay-setting methods.  

Tags: News Ticker, Payroll & Compensation, Talent Retention

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