Market Insights

In an employment market defined by transparency and shifting priorities, counteroffers are losing their appeal. Data from 2024 reveals that while 63% of employers increased salaries to fill roles, 57% chose not to make counteroffers to resigning employees—a five percent rise from the previous year. This trend marks a broader shift towards proactive retention and long-term engagement over reactive responses. Kaajal Khelawan, HR Manager and Operations Lead, explains, "Employers are shifting away from making reactive offers and focusing more on proactive retention." Rather than scrambling to retain staff once they hand in their resignation, more businesses are investing in the experience and growth of their current teams. "If an employee has chosen to leave, you need to let them go." Khelawan is direct about the limitations of counteroffers. "They don't work. They're a band-aid solution," she says. Most employees who accept counteroffers end up leaving within six to twelve months anyway. More critically, such offers can lead to pay inequality, damaging morale and creating internal tension when colleagues learn about unequal compensation. With growing emphasis on pay transparency, businesses are increasingly aware of how last-minute salary hikes may erode trust. As organisations strive to ensure fairness in pay structures, counteroffers become a liability rather than a lifeline. Juma Mrisho, Talent Acquisition Business Partner, agrees. He links the decline in counteroffers to deeper structural shifts: "Reactive offers are seen as a short-term fix that doesn't acknowledge the deeper issue within an organisation." He notes that companies are now prioritising long-term strategies such as employee engagement, leadership development, and cultural alignment. Mrisho also challenges the assumption that salary alone is the reason people resign. "The idea that a salary increase will solve the issue of someone leaving is a misconception. People are also leaving due to cultural or leadership issues. A counteroffer won’t fix that." The trend is clear: businesses are becoming more strategic with pay and retention. Rather than relying on quick fixes, they are creating environments where employees feel valued, supported, and motivated to stay. Khelawan concludes, "The goal is to create workplaces where employees don't want to leave, rather than scrambling to keep them once they've resigned." As we look ahead, the decline in counteroffers suggests that employers across Australia and New Zealand are embracing a more considered, people-first approach to talent management—one that values foresight over quick fixes and stability over short-term wins.

AI is rapidly transforming industries around the globe, and the human resources sector in Australia and New Zealand is no exception. With 54% of HR teams already investing in AI tools, according to people2people's Employment and Salary Report, it's clear that automation and predictive technologies are no longer futuristic concepts—they're part of today's evolving workforce strategy. Though nearly half of these organisations report no significant impact yet, the momentum is undeniable. From talent acquisition to onboarding and learning development, AI is starting to reshape how HR teams operate. Yet the journey is not without its complexities. "AI isn't a buzzword—it's a business advantage." Juma Mrisho, Talent Acquisition Business Partner, highlights the tangible gains AI can offer. "In terms of speed, efficiency, and decision-making accuracy, it’s definitely not just a buzzword," he explains. AI is already being used to streamline admin-heavy tasks, improve candidate matching, and personalise employee training pathways. However, barriers to broader adoption remain. As Mrisho points out, "The idea of inertia and resistance to change is something embedded in all of us." Concerns about return on investment, high costs, and the complexity of new systems are slowing uptake. Many traditional organisations are hesitant, needing time and guidance to adapt. Kaajal Khelawan, HR Manager and Operations Lead, addresses a common myth: "The biggest misconception is that AI will replace HR jobs. But the reality is it’s there to support them." She notes that AI tools require proper oversight, customisation, and human input to be effective—far from being plug-and-play solutions. Khelawan also warns against rushing implementation. "We’ve seen people adopt AI without fully understanding it, feeling pressured to innovate quickly," she says. For AI to work meaningfully, organisations must invest in education, planning, and change management. Looking ahead, both experts believe this is only the beginning. Mrisho envisions AI becoming a core part of HR over the next three to five years, powering everything from workforce planning to performance management. "The rapid growth of AI in just six to twelve months has been enormous. Thinking about where we’ll be in five years is genuinely exciting," he says. While AI opens the door to new possibilities, it also demands thoughtful integration. For HR teams in Australia and New Zealand, the focus must now shift from hype to strategy. As Khelawan concludes, "It’s best to approach it with an open mind. There are pros and cons, but with the right attitude, organisations can meaningfully assess how to adopt and benefit from it." In 2025 and beyond, HR professionals who balance innovation with insight will be best positioned to lead their teams into a smarter, more agile future.

As 2025 unfolds, work-life balance has firmly secured its place as the top priority for job seekers across Australia and New Zealand. According to people2people's latest Employment and Salary Report, flexibility is no longer a bonus; it’s a baseline expectation. With 78% of organisations offering flexible hours and 69% supporting remote work options, businesses that fail to adapt risk losing out on top talent. This cultural shift is driven by a desire for autonomy and trust. Employees today seek the ability to tailor their work around their personal lives, not the other way around. Kaajal Khelawan, HR Manager and Operations Lead, puts it succinctly: "Work-life balance has become such an imperative thing for all employees. They want independence. They want to be trusted." "Flexibility is no longer a benefit. It’s an expectation." That said, physical offices still have a place—but their purpose is changing. As Khelawan explains, "There definitely is a place for in-office models, but their role has changed. It should be focused on collaboration and culture building." Rather than simply housing employees, offices are becoming hubs for engagement and connection. Juma Mrisho, Talent Acquisition Business Partner, highlights other rising trends in employee benefits. Beyond flexibility, mental health and wellbeing initiatives are increasingly valued, as are financial wellness tools, career development opportunities, and progressive leave types like grandparent leave and menopause support. Mrisho adds, "There’s growing interest in purpose-driven benefits that really reflect personal values." Meanwhile, traditional perks like snacks and Friday socials, while still appreciated, are no longer enough on their own. Employees today are seeking a more personalised experience at work. This move towards customisation over gimmicks signals a new era in HR strategy. "One size doesn't fit all anymore," says Khelawan. "There is an understanding that not everything can be tailored to an individual, but going with the status quo is probably not the best course of action either." For businesses struggling to keep pace with these evolving expectations, outsourcing HR support can offer much-needed clarity and agility. Conducting anonymous surveys can help uncover what employees truly value, from reasons for staying to the motivations behind exits. Khelawan explains, "We work with a number of different clients. We have access to market benchmarks, scalable benefit programs, and we can help tailor strategies to attract and retain talent without the overhead of a full HR function." Mrisho agrees, adding that external HR support offers the flexibility and insights needed to remain competitive, particularly in uncertain markets. As work-life balance becomes the cornerstone of employee satisfaction in 2025, it’s clear that understanding and adapting to these new expectations is no longer optional—it’s essential. Businesses that respond proactively will be best positioned to attract, retain, and support top talent in the year ahead.