Workers are feeling less confident about their company's growth prospects than their employers due to cost of living pressures, as found in a recent study by Robert Half. This comprehensive survey included 500 hiring managers and 1,000 workers.
The study revealed optimism amongst 89% of employers with the belief that business conditions in 2024 will better than in 2023. Conversely, only 72% of workers shared this optimism. This reduced optimism amongst workers is driven by various concerns such as a potentially worsening economic situation (74%), reduced business opportunities (40%), and the lack of financial resources or budget (33%).
The research also indicated a generational shift in optimism regarding the companies' growth. Millennials and Gen Z workers were more optimistic, with 82% and 80% respectively feeling positive of the growth this year compared to their Gen X and Baby Boomer counterparts, holding a reduced optimism of 76% and 65% respectively.
Improved business conditions this year, as believed by employers, can be attributed to expanding business opportunities (44%), increased demand for products/services (42%) and an anticipation of an improved economic circumstance (38%). These elements have compounded to significantly amplify employers' confidence.
Nicole Gorton, Director at Robert Half, commented, "Continued financial stresses placed upon household budgets, caused by recent mortgage interest rate rises and the rising cost of living may be behind why workers overwhelmingly see a different economic situation than their employers and therefore hold less growth confidence than them."
Despite the discrepancy in optimism, there is still an overall increase in worker confidence regarding company growth compared to the previous year, the study found. This can be primarily attributed to increasing demand for products and services, increased financial resources, and a slight softening in the volatile economic situation.
Gorton further added, "From a business leader's perspective, increasingly positive sentiment and encouraging employment numbers are early indicators that 2024 is going to be a year of recovery and growth, which explains their increased confidence in their company's growth.
"Companies are transitioning from survival mode to proactive mode," she said.
The study also found that younger employees were more optimistic about growth prospects for the year. Despite the majority of Gen X and Baby Boomers also expressing some growth optimism for 2024, their confidence levels were comparatively subdued.
"While the quarterly average number of redundancies that occurred was lower in 2023 compared to pre-Covid, the continued squeeze on company profit margins may be unnerving older workers, particularly as they have experienced more economically challenging times during their working lifetimes than younger workers," said Gorton.
"However, as the national unemployment rate flatlines and interest rate rises are put on hold, Gen Z and Millennial employees may be more confident that better times lie ahead."