About 48 per cent of all new Australian business start-ups fail within the first four years, and just 77 per cent make their first anniversary, according to new data released by the Australian Bureau of Statistics (ABS).
However, the potential for failure isn’t deterring record numbers of Australians from getting into business – and the majority are doing it on their own.
In 2021-22, of the 473,000 new businesses that commenced, just 25 per cent had employees.
RSM Australia Director of Business Advisory Philip Price said non-employing businesses – which covered sole traders and partnerships without employees – comprised 60 per cent of the 2.6 million businesses operating at the end of June 2022.
Despite it being an ‘employee’s job market this new data shows Australians are prepared to take the risk and set up their own business,’’ Mr Price said. In a reflection of Australia’s tougher economic climate and current skills shortages, the number of non-employing businesses increased by 10 per cent in 2021-22, with a net movement of 15,000 surviving businesses changing their status from employing to non-employing,’’ he said.
‘’Interestingly, the reverse happened in 2020-21, when employing businesses increased by 14 per cent, with 58,000 surviving businesses changing from non-employing to employing,’’ he said.
‘’The tightening labour market skills shortage is exacerbated in the current economic and business environment as individuals start new businesses in big numbers.”
However, Mr Price issued a note of caution to Australians who may be unhappy in their current jobs and are considering setting up their own business.
Unfortunately, the survival rate of new non-employing businesses is poor with just 74 per cent still operating after the first year and only 47 per cent still standing after four years,’’ he said.

‘’This compares with a four-year survival rate of 72 per cent for new businesses with 20-199 employees and 70 per cent for businesses with 5-19 employees.’’

Mr Price said sole proprietorships with one owner – also known as sole traders – also had similarly low new business survival rates with only 43 per cent still operating after four years.

‘’Being a sole trader may be the simplest and cheapest business structure to set up, but it’s not the most protective or successful,’’ he said.

‘’These types of entities are risky because they offer no asset protection, with the owner having unlimited liability for all debts accrued.

Do the groundwork to avoid a start-ups fail, first by putting together a business plan and seeking expert advice on the best legal structure to use.”

One in five Australians encounters scams on a daily basis. Avast provides us with the top tips to spot a scam.

A quarter (25%) of Australians encounter scams on a weekly basis, according to research commissioned by Avast¹, a global leader in digital security and privacy. The new research reveals the extent of the scamdemic currently facing Australians with three-quarters experiencing a spike in attempted scams in the last 12 months, and one in five (19%) being targeted by scammers at least once a day.

Historically, email has been the main means by which scammers target their victims, however that risk has now spread to multiple communications channels, with the research showing scams are reaching Australians mainly via email (78%), text message (75%), phone calls (66%), messaging services such as WhatsApp or Facebook Messenger (36%), and social media (31%).

While Avast’s research reveals that most Australians (84%) believe they can identify a scam, with 3 in 5 (61%) confident they wouldn’t fall for one, the Australian Competition and Consumer Commission’s (ACCC) Scamwatch tells a different story. Australians have reported over $336 million lost to scams in 2022 (July), compared with $323.7 million over all of 2021, which was already a staggering 84% increase on 2020.

Stephen Kho, cyber security expert at Avast says, “We are in the midst of a scamdemic, and there is a clear disconnect between Australians’ perceived confidence in ability to identify a scam and the increasing amount of money being lost to scams every year. In reality, this is being further fuelled by our own fear of embarrassment, with half (50%) of Australians admitting they would feel embarrassed if they fell for a scam despite the prevalence and sophistication of some of these scams, as scammers get sharper with their tools and scams become increasingly more targeted to individuals’ situations.”

The research shows that nearly nine in ten (89%) respondents agreed that online scams are becoming much more sophisticated, and 44% feel scams are increasingly becoming more personal and targeted. Many (45%) admit that they would be more likely to fall for a scam that addresses them personally by name.

“The best tool we have for combatting this scamdemic is to make a unified effort to speak up about our experiences to help educate others on what to look out for, as scammers become craftier and target us in new ways every day. We need to destigmatise the experience of being scammed,” Kho says.

As experts in digital security and privacy, Avast has created the Scamdemic Centre to help educate digital citizens around scams and trigger important conversations and knowledge sharing with family and friends.

“The vast majority of Australians (85%) agree that there needs to be more education around how to avoid falling for a scam, and Avast’s Scamdemic Centre is aimed at playing a role in that while encouraging Australians to share their experiences to further educate the wider digital community and help tackle this ever-growing issue,” explains Kho.

The three main reasons Australians believe scams are becoming increasingly difficult to spot are advanced technology being readily available to scammers (73%), the many ways scammers can gain access to their victims’ personal information (i.e. text, email, social media) (62%), and the belief that people share too much information online, making them ‘easier’ targets in the eyes of cyber criminals (60%).

“Australians recognise that people are getting complacent with their online security (44%), but with free digital security products like Avast One, this is easily rectified.

“Avast truly believes in prevention, as it is difficult to recover financial losses after being deceived into handing them over to bad actors,” Kho continues.

Tips to help you spot a scam:

• The sender’s name is vague, and the email address is long or convoluted
• The sender’s phone number is international or an unknown local phone number
• The email or message is attention-grabbing or alarmist
• The call you have received is from an unknown number with a robo speaker
• The email or message urges immediate action of some kind
• The email, message or call cites some pretence for seeking your personal information, including asking you to log in or confirm your details on a website
• The email or message requests payment or a transfer of funds
• The email or message urges you to click hyperlinked text or a link without clarifying where you are clicking

The Scamdemic Centre can be found here: https://www.avast.com/en-au/avast-scamdemic-centre#pc

About the research:

¹ The survey was conducted by Pureprofile on behalf of Avast, between 6th June and 8th June 2022, with a nationally representative sample of 1,010 respondents in Australia aged 18-65+ years old.

FLK IT OVER enables property keys to be logged and photographed in a SaaS platform that enables managers to follow up.

A week manning the reception desk to cover Covid staff shortages led FLK IT OVER CEO and Founder Andrew Colagiuri to create a new system for property keys, which he believes is a game changer for property managers. 

“During Covid when the lockdown was introduced for select Sydney suburbs eleven of my fourteen staff were affected, so I chose to man the reception desk and experienced first hand how outdated the check-in and out system for property keys is,” says Mr Colagiuri.

“Like most businesses at the time, there was no option but to roll up the sleeves and do whatever was needed to keep the business going, this meant spending some time on reception,” said Mr Colagiuri. 

“After some research we found most offices still using a checkout book, or excel spreadsheet so there was definitely an appetite for an updated system that not only tracks keys, but works seamlessly and delivers a great experience for their trades who often hold keys and return when they are back in the area,  not knowing the urgency .”

Trades are busy, and on the road a lot so writing messages or answering their phone can be tough which leads to a lot of unnecessary back and forth, but with our smart sms conversations it’s so quick and efficient for them to keep the agent informed and updated.”

“FLK A KEY is an extension of the e-document signing tool FLK IT OVER, that enables keys to be logged and photographed in the platform and an overdue section enables managers to quickly see what keys need to be followed up.” 

“When keys are overdue a text message is sent to any trades or tenants to notify them their keys need to be handed back, FLK A KEY has an automated conversation on the agent’s behalf via sms. It then emails this conversation to the agent. It’s all about using technology to deliver efficiencies .”

“It enables those with the overdue keys the ability to respond with the touch of a button explaining the delay or date of intention for returning the property keys.”

“This puts an end to chasing the return of keys with endless phone calls and the technology makes it very simple to see who needs reminding to return the keys.”

“Chasing 10 outstanding keys can take upto 30min of phone calls and back and forth, now they can let FLK A KEY do that for them and move on to dollar productive activities.”

“When keys go missing, it costs time and money (and sometimes the client) so we want to make sure we remove all three issues for agencies.”

“If the agency has 300 rental properties and uses this technology rather than manually updating the traditional spreadsheets and endless phone calls they usually have 20-30 keys out at any time so the time save nature is massive, plus it’s a great customer service experience.” 

“If agencies want to increase profits they will need property managers to manage more properties and the only way they can do this is through improving efficiencies by using the latest technology.” 

“Since its launch four years ago over 500 real estate agencies are actively using FLK IT OVER, including ASX listed McGrath Estate Agents, translating to 100 percent year on year growth with six figures a month in recurring revenue.” 

“Over 4,500 active property managers are logging in every month to use the system with around 13,000 real estate documents a month.”

“FLK A KEY is available now for property managers to use in conjunction with the FLK IT OVER software.”

Consumers are embracing digital payment methods and recognise the potential for biometrics to offer security and convenience when making digital payments. 

However, overall comfort remains low with BNPL and crypto, with adoption hindered by a lack of understanding and pessimism. 

New data from Mastercard’s 2022 New Payments Index Report reveals that more than half of consumers (58%) say that using biometric technologies for identity is more secure than a PIN, password, or another form of identification. 

However, 74% of consumers are concerned about what entities have access to their biometric data.

Key Australian findings from the 2022 New Payments Index report include: 

• Digital payments have momentum
  • Consumers are making purchases in diverse ways with 9% of consumers having bought something using IoT/“smart” device, and 6% using voice assistant platforms
  • Currently, 17% of Aussies are comfortable using cryptocurrency to pay, and 21% have said they will likely use in the next year
  • 34% of consumers are comfortable sharing financial information with apps to have access to payment tools that help them manage their money
• The next frontier in payments
  • 51% of consumers agree they would use cryptocurrency more if they understood it better (+7% from 2021)
  • 26% of consumers have done at least one crypto related activity in the past year: 
  • 21% of consumers have bought crypto in the past year, 21% have held crypto as an investment, 19% have opened/used a crypto wallet
    • Of crypto users, 51% have increased their usage in the past year
    • 62% of consumers agree the government should regulate the cryptocurrency and stablecoin industry
• A balance between security and convenience
  • More than half (51%) believe it is easier to make payments using biometrics than a card or device
  • 63% believe using biometric technologies is easier than remembering PINs/passwords. However, 74% of consumers agree they are concerned about what entities have access to their biometric data
  • 52% of consumers believe that using biometric technologies for payments is more secure than two factor authentication
  • Biometric data used or planned to use to make payments include fingerprint (49%), facial recognition (45%), voice recognition (39%) and palm/hand (32%)
• Planning for payments (BNPL)
  • Consumers are open to using BNPL particularly for large/emergency purchases; however, only 42% are comfortable using BNPL today 
  • 60% of consumers agree they would feel safer using a BNPL solution backed by a major payment network than from other providers

Australian small businesses record the highest jobs growth in 11 months, despite a slowdown in sales.

Xero, the global small business platform, today released its latest data on the health of Australia’s small business economy during July from the Xero Small Business Index. Based on aggregated and anonymised transactions from hundreds of thousands of small businesses, the Index, developed in collaboration with Accenture, is part of the Xero Small Business Insights program.

Xero’s Small Business Index fell 40 points in July to 111 points and now sits around the 2021 average. The big swings in the Index over June and July largely reflect volatility in the time to be paid metric, as a result of the end of the financial year in June. July also saw sales growth slowing to 7.5 percent year-on-year (y/y), a 4.1 percent y/y rise in jobs and wage growth marginally higher, at 3.6 percent y/y.

Joseph Lyons, Managing Director Australia and Asia, Xero, said: “Small businesses remained resilient in the face of inflation and other supply chain challenges according to the July index. In fact, we’ve seen the strongest jobs growth in almost a year, even across industries like hospitality and agriculture, which have recently struggled to find talent.

“While inflation is impacting small businesses globally, our data shows that Australian small businesses are faring slightly better compared to those in New Zealand and the United Kingdom in terms of sales. While this doesn’t mean it’s smooth sailing for local small businesses – as most can attest to – it’s promising to see an overall above-average result, especially for sectors that have been doing it tough,” says Lyons.

Strongest jobs growth result since August 2021

Jobs rose 4.1 percent y/y in July – the largest rise since August 2021. This is above the long-term average of 3.0 percent y/y for the Xero Small Business Index series, meaning jobs growth has now been positive for three consecutive months.  

Looking at the states, July saw Tasmania record positive jobs growth (at 1.8% y/y) for the first time in 7 months while New South Wales led all states at 7.7 percent y/y.

All industries reported positive jobs growth, including hospitality (+8.6% y/y), which had recorded falls in jobs for the previous six months. Information media and telecommunications (0.8% y/y) and agriculture (0.2% y/y) reported the lowest figures, while arts and recreation led all industries at 11.1 percent y/y, a significant result given a tough couple of years due to COVID-19 restrictions.

Wage growth did not rise significantly, despite the minimum wage increase

Despite the annual increases in minimum wage (5.2%) and award wages (4.6%) that came into effect on 1 July, the wage result suggests that there has not been a material impact on aggregate wage costs. Wages grew by 3.6 percent y/y, up from 3.4 percent y/y in June.

Across industries, health care continues to record the lowest wages growth, at 2.7 percent y/y whereas information media and telecommunications was the leading industry in terms of wage growth, at 4.3 percent y/y.

“July was the first month of the new financial year where the increase in minimum and award wages was in place and we didn’t see a significant effect. We will get more award wage information in October when the award wage rise comes into effect for the hospitality industry,” says Louise Southall, Economist, Xero.

Cost of living pressures see sales continuing to fall

The main area of concern for July is the slowdown of sales growth, which slowed again to 7.5 percent y/y, from 11.4 percent y/y in June. Many Australians are facing cost of living pressures as prices rise faster than wages, causing a flow of effect when it comes to spending in small businesses across the country.

“When prices are taken into account, using the June quarter Consumer Price Index, it suggests that the volume of sales rose a smaller 1.4 percent y/y (down from +5.3% y/y in June). But this means small businesses still sold more goods and services in July 2022 than they did in July 2021,” said Southall.

“This is different to the experience of small businesses in other countries like the United Kingdom and New Zealand, where sales, excluding price impacts, have actually declined for June and July.” 

New South Wales (12.9% y/y) and South Australia (10.7% y/y) led all states with double digit sales growth. Hospitality (+21.6% y/y) and arts and recreation (+22.6% y/y) were the leading industries in terms of sales in July, again another positive reflection that the arts and recreation sector is returning to full strength.

Time to be paid rose 2.7 days to 23.2 days

The average wait time for small businesses to be  paid rose 2.7 days in July to 23.2 days. This follows a 3.0 day fall in June, which was largely due to the end of the financial year when this metric usually experiences a large improvement, hence the reversal is not unexpected. 

There was a 1.6 day rise in late payments to 6.5 days after a record low of 4.9 days in June, which was also impacted by the end of the financial year.

Go to the website to download the full July results, including industry and regional breakdowns. See the methodology to learn more about how the Xero Small Business Index is constructed.

As Australian businesses face staff shortages and rising inflation, new data from Australia’s largest business organisation, My Business, shows more than half of small business owners don’t have an exit strategy.

The first findings of the ‘Recipe for Success Survey’, of nearly 2,000 Australian business owners, found that of those that did have a strategy, 41% plan to sell their business to another organisation, 20% plan to leave it to a family member and 15% intend to eventually close down.

Richard Spencer, Chief Customer Experience Officer at My Business, who is releasing the survey data this week at the My Business roadshows, says it’s important to map out a business exit strategy – even if you’re not planning on leaving anytime soon.

“The survey tells us 59% of respondents don’t have an exit strategy and even more (75%) didn’t have one before starting their business,” says Mr Spencer.

“Without a clear plan for how you will steer the business, and eventually wind up your involvement, you may end up selling the business for less than it’s worth.”

“The whole process can also end up being a lot harder than it needs to be – often business owners are left scrambling to get things in order.”

Top 3 things to consider when preparing an exit strategy for your business:

1. Plan for the future you want: Don’t just create a business plan but plan what you want from your business as an owner. 35% of respondents were not entirely clear on what they wanted to achieve from owning their business.

2. Get your business valued: Our data found that only 1 in 5 businesses have a formal valuation of what their business is worth. 40% are simply guessing what their business is worth!
3. Actually write an exit strategy: 60% of respondents did not have an exit strategy. Business owners tend to be more likely to benefit from owning a business if they plan their exit as early as possible. Plan your way out as carefully as you planned your way in.

The survey also found that small business owners have a greater appetite for risk than the general public and were also more inclined to be both goal oriented and self-motivated.

The survey responses consisted of 1,850 small business owners and also 2,047 members of the general public and compared their attributes.

“The other major personality trait we noticed that was more prevalent in small business owners was a commitment to lifelong learning,” says Mr Spencer.

“We undertook the survey to gain more insight into what attributes makes a successful businessperson so we can empower other owners on their business journey and focussing on continued development and constantly learning, growing and adapting are key to success,” 

“Of the business owners surveyed the majority of them were female, aged between 34-44 years old and nearly half had been in business longer than 5 years.” he says.

Survey Source: ‘Recipe for Success Survey’ Conducted by My Business & Pure Profile – August 2022

My Business ‘Recipe for Success’ Roadshow Dates

 Nespresso is today calling for entries to the Australian StartCup Challenge; a new competition which supports and rewards innovative, circular business ideas.

The challenge is open to pioneering start-ups and SMEs from any sector or industry to pitch their circular solutions for review by an expert jury and then via public vote for the chance to win AUD$50,000, a Nespresso Momento Small Office Starter Pack and access for up to four team members to attend B Lab’s Become a B Corp workshop.

Entrants can apply between Tuesday 16th August to Sunday 11th September, 2022 by uploading a one-minute video pitch and completing a short application form, with details on how to enter available on the Nespresso website.

An important next step in Nespresso’s B Corp ™ journey following certification in April, StartCup seeks to build on the company’s 30-year commitment to sustainability and innovation by providing a platform for innovative ideas, services or products that contribute to strengthening the circular economy in Australia.

“Sustainability and innovation are anchored in Nespresso’s DNA, and both are critical to addressing today’s environmental and social challenges,’ said Jean-Marc Dragoli, General Manager of Nespresso Oceania, and member of the StartCup Challenge jury. “By launching the Australian StartCup Challenge, we want to contribute, as a certified B Corp company, to the movement of the circular economy, and put entrepreneurs in the spotlight. Many great ideas can grow over a cup of coffee, and we are excited to support Australian innovations with potential for real, positive change.”

Rewarding the most innovative sustainability initiative

Entries will be reviewed by a jury of leaders from different sectors who are committed to innovation and sustainable development. These include:

• • Jean-Marc Dragoli, General Manager Oceania, Nespresso
• • Mariah Monaghan, Head of Marketing and Sustainability, Nespresso Australia
• • Professor Veena Sahajwalla, Founding Director of the UNSW Sustainable Materials Research and Technology (SMaRT) Centre
• • Nik Robinson, Co-Founder, Good Citizens
• • Zoe Mellick, Sustainability Lead, Glam Corner
• • Charlotte Connell, Climate Reality Leader, Co-Director and Sustainability lead at Founder Institute and EIR in Sustainability at Fishburners
• • Yasmin Grigaliunas, CEO and co-founder, World’s Biggest Garage Sale
• • Lisa McLean, CEO, Circular Australia

The jury will select three finalists which will go on to a public vote, opening on 28 September on the StartCup competition page and closing on 14 October.

The winner will be announced at an award ceremony attended by finalists in Sydney on 3 November.

“I am delighted to be one of the StartCup Challenge judges,” said Professor Veena Sahajwalla, Director of the UNSW Sustainable Materials Research and Technology (SMaRT) Centre. “This is an important competition that gives a new generation of companies the opportunity to develop and implement innovative projects that have a positive impact and tackle some of the biggest challenges our world faces. I have worked extensively to commercialise ground-breaking recycling and ‘waste to product’ technologies to help deliver more circular solutions and I am excited to see the innovative ideas participants provide.”

Committed to the circular economy

For more information visit

D-Link has launched its DSL-X1852E, an AX1800 Wi-Fi 6 VDSL2 /ADSL2+ Modem Router with VoIP, providing universal DSL and NBN / UFB connectivity. The DSL-X1852E is an all-in-one Modem Router with VLAN tagging and enjoys AX1800 Speeds with up to 1200Mbps on its 5GHz band and 574Mbps on its 2.4GHz band. It also uses the latest WPA3™ 128-bit encryption, which replaces previous industry-standard encryptions on Wi-Fi devices, and it also enables you to seamlessly test your Internet Speed and connection with its built-in Internet Speed test powered by Ookla®.

Providing super-fast speeds for all your wired devices, the DSL-X1852E sports a dedicated Gigabit Ethernet WAN port and four Gigabit LAN ports, as well as a USB port where you can connect an optional 3G/4G LTE USB Modem, such as D-Link’s 4G LTE USB Adapter (DWM-222), for mobile broadband access or failover from your fixed Broadband service if required.

The DSL-X1852E also provides two FXS ports, allowing customers to connect up to two telephone handsets and utilise the Voice Over Internet Protocol (VoIP) to make calls using your Internet connection (where supported by your ISP)*. It also fully supports all NBN (Australia) and UFB (NZ) connections.

The DSL-X1852E uses Wi-Fi 6’s cutting-edge Orthogonal Frequency Division Multiple Access (OFDMA) technology, where small data packets destined for multiple devices are transmitted together and never have to queue up again. This makes it ideal for smart homes filled with bandwidth-hungry IoT devices, each battling for airtime.

It also has two-way MU-MIMO technology which helps distribute the flow of data to multiple devices simultaneously.

The DSL-X1852E leverages these new multi-user versions of OFDMA and MU-MIMO for better upstream and downstream transmissions efficiency, unlike previous Wi-Fi 5 technology where MU-MIMO could only operate simultaneously in downstream transmissions. This combination greatly increases capacity, coverage and performance in ultra-high-density environments.

With high-gain antennas, power amplifiers and beamforming technology all built-in, the DSL-X1852E provides a powerful way to extend your Wi-Fi signal reach and focus stronger Wi-Fi in the direction of your devices to ensure a faster and more reliable Wi-Fi experience.

The DSL-X1852E also conserves power by utilising Target Wake Time (TWT) which helps reduce battery consumption for connected devices by communicating with them and deciding when and how often the device requires data transfers. TWT increases the device’s sleep time, therefore cleverly conserving energy and helping save battery life.

When nearby Wi-Fi could be interfering with your wireless signals and slowing things down, the DSL-X1852E and Wi-Fi 6 put an end to this with BSS Colouring Technology which makes transmissions more unique by ‘colouring’ them with their own unique code. This, in turn, means devices can decide whether to transmit signals or ignore them, based on their ‘colour’. It also results in less interference, less Wi-Fi bottlenecks and enhanced range.

D-Link embracing Wi-Fi 6 into its Modem Router networking devices brings next-generation Wi-Fi technology into your home, giving the quantum leap in capacity, speed and range you need to handle all your Wi-Fi demands. This is what makes all-in-one Modem Routers like the DSL-X1852E the ideal device for high-performance, device-dense Smart Homes.

Virtual Private Networks (VPN’s) have become a necessary and useful tool in today’s malware-riddled world. To make using a VPN as easy as possible, the DSL-X1852E’s VPN Wizard lets you configure LAN-to-LAN and remote access VPN connections, while its built-in passthrough feature also allows any internal devices connected to the router to establish outbound VPN connections. Simple, effective and all part of this clever, new Modem Router.

Finally, the DSL-X1852E has been thoroughly tested by multiple Internet Service Providers across both Australia & New Zealand prior to release to the wider market. With TR-069 Management and VLAN Tagging support built-in, the DSL-X1852E has been designed to support Service Provider networks from the ground up.

Key features of the DSL-X1852E

• Integrated VDSL/ ADSL2+ Modem for universal DSL / NBN / UFB connectivity across Australia and New Zealand

• The latest Wi-Fi 6 technology provides faster Wireless speeds, greater capacity and less network congestion

• Speeds up to AX1800 (1200Mbps on the 5GHz band and 574Mbps on the 2.4GHz band)

• One dedicated Gigabit Ethernet WAN port and four Gigabit LAN ports provide fast wired connectivity

• Connect up to two phones to makes VoIP calls over the Internet (where supported by your ISP)*

• OFDMA and MU-MIMO technology communicate more data to more devices while simultaneously reducing lag

• BSS Colouring technology reduces interference, making more efficient use of Wi-Fi spectrum

• Increased battery life of connected devices with Target Wake Time technology

• Supports the latest WPA3™ encryption

• Supports VLAN tagging for wholesale Service Providers (RSP’s)

• Supports TR-069 Management functionality for Service Providers

The DSL-X1852E AX1800 Wi-Fi 6 VDSL2 /ADSL2+ Modem Router with VoIP is available now from www.dlink.com.au (RRP AUD$349.95) and from all authorised D-Link partners and retailers.

Enter: the quiet quitting trend. Trending on social media platforms such as TikTok, the slow-it-down movement of quiet quitting can be seen as a rejection of the hustle culture mentality that has ruled the roost for the past decade. Particularly for millennials and the emerging young people/Gen Z set. 

The trending rejection of hustle culture that’s been going wild on TikTok actually has its roots in shrinkflation and long-term workplace trends, says UNSW Business School’s Associate Professor Mark Humphery-Jenner.

Millions of Australians are experiencing a decline in real wages. Employers have resisted increasing salaries, referring to rising impacts on profits.  

But continuing down this path – particularly when it comes to a skilled workforce – could end up harming the companies’ bottom lines in any case. 

What can workers do instead of quitting? Quiet quit 

Are you a quiet quitter?  

‘Quiet quitting’ is when a person no longer goes the extra mile or works hard at work. Perhaps you have been doing unpaid overtime, working nights or weekends, or have become super-normally efficient alongside your co-workers.  

You have gone through the pandemic and lockdowns with increasing workloads, stress and damage to mental health, but with stagnant or falling wages. As you keep working – with no pay rise in sight – your work-life balance falls. 

This is the situation many highly skilled workers find themselves in. But how do they respond? 

They know their market value and can see a tight labour market and how much value they have to give at a company with the better work culture. Why should they give anything more than the bare minimum to a company that has failed to reward them?  

So they merely do their duties per their job description but do not go above and beyond. 

How is quiet quitting related to shrinkflation? Consider Tim Tams 

Declining real wages – and stagnant nominal wages – have led to this alleged trend. It could also be seen as labour force shrinkflation. 

Let me explain using the metaphor of the humble Tim Tam packet. 

Shrinkflation involves keeping the price the same but reducing the quantity supplied. So, the price of a packet of Tim Tams might not change, but the buyer will get fewer biscuits per dollar.

When businesses create an environment that is pushing people to ‘quiet quit’, we risk labour force shrinkflation. Wages stagnate, but workers provide fewer units of effort per dollar.

Why is workforce shrinkflation coming?

Wage growth has not kept up with inflation, meaning workers have less purchasing power as we enter a cost of living crisis.

This has become a significant issue in 2022, where inflation has soared, and wages have only increased marginally. Consumer Price Index (CPI) inflation recently hit 6.1 per cent. The Australian Treasurer – Jim Chalmers – indicated it could soon rise to 7.5 per cent. Conversely, wage growth has stalled, increasing only 2.4 per cent.

This pressure exacerbates an even greater problem when we consider 2020 and 2021. During these years, companies often kept pay unchanged, reduced or increased employee workloads and extended them to long hours. 

Employees are unsurprisingly pushing back against businesses that seem to be taking advantage of them. This is especially true regarding highly skilled labour with outside opportunities.

It isn’t rocket science but can be linked to the economic theory of ‘Utility theory. Utility theory aims to model factors that increase individual ‘utility’ (i.e., welfare or sense of well-being). In this case, it boils down to the idea that welfare increases with money and decreases with effort and risk. 

So, if wages decrease, is the only way for workers to maintain their sense of well-being? Work less. 

Does the new trend mean workers perceived as ‘slackers’ may lose their job?

When unemployment is high, workers must often stomach this damage to their well-being, knowing they have limited outside options. But unemployment is currently at decade lows at 3.6 per cent in the US and 3.5 per cent in Australia.

This makes it the company’s problem. 

Falling effort levels can reduce output quality and/or quantity. If a talented employee could have produced an item, closed a sale, or otherwise improved revenue but now stops working those extra hours, income will clearly fall. 

Is quiet quitting a new trend?

The trend of ‘quiet quitting’ has been clear for decades, particularly among CEOs. It is well established that an ‘entrenched’ CEO might decide to ‘live the quiet life’ when they are poorly incentivised to do otherwise. 

A badly motivated CEO might also undertake ill-disciplined investments, like overpaying when doing takeovers, safe in the knowledge that such transactions will not harm their future careers. Or they might just focus attention on pet projects, such as philanthropy designed to cater to their own interests or ego.

To counteract this, firms incentivise CEOs with stock and equity to align their goals and objectives with those of shareholders. There is no reason to believe that other skilled employees would act differently if offered a pay rise or similar.

What can companies do about quiet quitting?

Companies’ margins are under pressure, and it is not always realistic to expect a company to increase wages. This is especially for small and medium enterprises. Tying wages to inflation can also trigger a wage-price spiral. 

How then motivates employees? Companies have a clear solution: incentives linked to performance and value creation. This is especially obvious when employees produce discrete workpieces or have clear, measurable outcomes. 

For example, if that employee creates, sells, or runs a product that might create value, provide commissions, a slice of revenue, or gross profits. Or, if doing a better job – which takes more effort – helps the bottom line, incentivise that effort that increases job satisfaction.

Companies should not bury their head in the sand when faced with quiet quitting. If skilled employees are balking at falling wages, increased workload demands, and are less willing to work additional hours, ignoring the problem will worsen. Top talent will leave. And this ultimately will harm the bottom line. 

Instead, they can be part of the solution and grow the pie for themselves and talented workers. But ignoring workers’ concerns will undermine profitability long term.