The 2025 Job Market: The Salary Squeeze, Redundancies, and What We Can Do About It

If you’ve been reading the headlines or doomscrolling LinkedIn lately, you’ve likely seen two big themes emerging:

“I’m ready to quit.”
“Mass redundancies across multiple sectors.”

Yep. Both are true.

According to the latest Hays Salary Guide reported by Nine News, more than 61% of Australian workers are considering quitting their jobs this year! The job market in 2025 is a bit of a paradox: people want better pay and career growth, but inflation is outpacing wage increases, businesses are tightening belts, and the number of applicants per job is skyrocketing. Welcome to the paradoxical world of the 2025 labour market.

The Salary Squeeze: Wage Growth vs. Inflation

Despite wanting better salaries (understandably!), most Australian workers have seen a real drop in take-home value thanks to rising living costs.

The average full-time salary is $90,416, but a recent News.com.au survey found that 56% of Aussies don’t consider themselves “rich” unless they earn over $250,000. Once upon a time, six figures sounded like financial freedom. Now? It barely covers the rising cost of groceries, housing, and childcare.

But it’s not just workers feeling the pinch. Businesses are doing it tough too — facing unpredictable markets, cost pressures, and nervous investors. Many would love to offer bigger pay rises, but the reality is, they simply can’t.

Mass Redundancies = Mass Uncertainty

2025 has already seen sweeping job cuts across sectors like tech, consulting, retail, and energy. Big names like Microsoft, Google, PwC, Myer, and Origin Energy have all made headlines for letting people go.

This has led to a tricky situation:

• More people want to leave their jobs…
• But fewer feel confident that a better opportunity is out there.
• And many are stuck in a holding pattern — not happy where they are, but not ready to leap either.

This contributes to presenteeism, when people physically show up to work but mentally and emotionally check out. It’s costly. Globally, presenteeism is estimated to cost up to $2 trillion a year, and here in Australia, about $34 billion.

The Salary Paradox: Money ≠ Long-Term Happiness

Research shows that people on higher salaries often report greater satisfaction but it’s not always long-lasting. This is the salary paradox. That pay rise might feel amazing at first, but over time, expectations recalibrate, and the initial “high” wears off.

That’s why things like meaningful work, autonomy, flexible work practices, psychological safety, and strong leadership matter so much. They’re the glue that holds job satisfaction together, long after the shine of a bigger pay packet fades.

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So What Can We Do?

Let’s look at some tangible actions for both sides of the table, because everyone’s under pressure.

5 Tangible Moves for Employers

When talent is nervous, burned out, or tempted to jump ship, here’s how leaders can respond with clarity and care:

1. Start the conversation early — Don’t wait for a resignation letter to discover someone’s unhappy. Check in regularly. Be real. Be open. Ask questions that go beyond KPIs.
2. Go beyond pay — If budgets are tight, get creative:
   • Offer flexibility
   • Reward with recognition
   • Create learning opportunities
   • Provide autonomy and purpose
   Small things make a big impact.
3. Do redundancies right — If tough calls need to be made, lead with humanity. Communicate clearly, provide support, and uphold dignity. The way you offboard people reflects your culture more than any mission statement ever will.
4. Invest in development — Promotions don’t always require external hires. Grow your people. Show them a path. If they feel stuck, they’ll start looking elsewhere.
5. Accept that sometimes people will leave — You can do everything right and still lose top talent. Celebrate the role you’ve played in their growth and part with grace — it can leave the door open for future returners and a glowing reputation.

5 Grounding Tips for Employees

If you’re stuck in limbo — bored, burned out, or just uncertain — here’s how to move forward with intention:

1. Be honest about what’s not working — Talk to your manager. Don’t suffer in silence. A well-framed, constructive chat can open doors.
2. Do your research — Understand your market value. Compare benefits, not just salaries. Be clear on what you’re asking for — and why.
3. Consider the whole package — More money doesn’t always equal a better job. Think about commute, flexibility, empathy, and culture. Ask: Is this really better?
4. Look before you leap — Reflect on what’s driving your decision: growth, burnout, values misalignment. Explore all angles before making a move.
5. Take ownership of your fulfilment — Your employer isn’t solely responsible for your happiness. They should offer safety, support, and fair pay, but you hold the power to connect with your purpose and steer your career.

Life by Default vs Life by Design

Life by Default is:

• Reacting to your circumstances
• Following someone else’s plan
• Living in autopilot

Life by Design is:

• Making intentional choices
• Aligning actions with values
• Pursuing growth on your terms

Whether you’re running a team or navigating your own next chapter — now’s the time to choose intention over reaction.

Final Thought: Build Bridges, Not Barriers

The 2025 job market is complex but it’s not without hope. With clarity, empathy, and courage, we can design workplaces (and careers) that work for real people.

• Let’s keep the conversation going.
• Let’s make space for the grey areas.
• And let’s build a work world where people and performance can actually thrive side by side.

Feeling stuck or ready for change?

At EHQ, we help leaders and organisations unlock their full potential — even in uncertain times.

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