That’s despite an average 9% pay boost on the table for workers moving to new companies, according to e61 Institute's latest findings.

By moving to a new company, workers on a median wage could pocket an extra $5,700 a year, compared to those who remain in their jobs. 

That figure was even higher for younger workers, with those aged between 21 and 34 years experiencing a pay jump of around $7,500 annually on the back of a new job.

But despite such juicy incentives, not as many Australians are jumping ship to new jobs as might be expected.

“Despite the strongest labour market in decades, job switching rates have only recently risen to a little above the pre-pandemic level,” e61 senior research economist Aaron Wong said. 

Job switching rates reached 9.5% in 2023, a nose higher than the 8.5% recorded in 2019.

“If people aren’t switching to better jobs in a record-setting labour market, it suggests that there are fundamental issues in the Australian labour market,” Mr Wong said.

The nation’s unemployment rate hit a low of 3.5% in late-2022. 

It has since recovered somewhat to sit at 4.1% in January, according to Australian Bureau of Statistics (ABS) data released on Thursday.

That means the pool of applications for vacant positions is far smaller than it was in 2019, when the unemployment rate bottomed out at 5%. 

So, what’s stopping Aussies from jumping ship to bolster their pay packets?

Workplace laws and regulations could be at the heart of the apparent hesitation, e61 notes.

“We have raised the issue of non-compete clauses in employment contracts as possibly discouraging workers from moving to a better job,” e61 CEO Michael Brennan said. 

“Complex occupational licensing and other credentialing requirements across different states and territories are also likely to affect workers’ ability to switch jobs.”

The research also found that the housing market has a notable impact on wage growth. 

If workers feel unable to move houses, they’re more likely to find it difficult to switch to better-matched jobs.

Policies like stamp duty, the effective cost of which has increased more than five times over the last 30 years thanks to soaring house prices, make it harder for people to efficiently change homes. 

More job ads published in January

In better news for those searching for a new role, the latest SEEK-NAB Employment Report identified another uptick in job ads last month.

“With job ads having increased over the past two months, it could be unmet labour demand is growing again,” NAB head of market economics Tapas Strickland said.

The number of job ads hitting the employment marketplace climbed 1.3% month-on-month in January, but remains 17.5% lower than the same period of 2023. 

Simultaneously, however, the number of applicants per role climbed to a five year high, according to the report, with 13% more applicants per role than in late-2019. 

“While labour markets remain tighter than before COVID, this measure indicates some material change in labour market conditions for employers seeking to find workers,” it reads. 

Unemployment is expected to climb gradually from here. 

The Reserve Bank of Australia (RBA) expects quarterly unemployment to reach 4.4% by June next year. 

While that might be bad news for many, it could bring positive happenings for borrowers.

Unemployment typically moves counter to inflation – when one rises, the other falls.

Thus, rising unemployment could be a precursor to falling interest rates. 

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