What’s happeningAustralian workers’ relationship with their jobs has deteriorated sharply, with only 14% of knowledge workers reporting healthy working relationships, a decline of 13 points from 2024.
Why this mattersWith only 44% finding purpose in their work and only 39% feeling sufficiently recognized, Australian workplaces are facing a retention and engagement crisis that requires immediate action from leadership.
Australian workers are experiencing one of the most dramatic declines in job satisfaction globally, according to new research that paints a sobering picture of workplace relationships in 2025.
From HP Inc.’s Work Relationship Index found that only 14% of Australian knowledge workers report having a healthy relationship with their work, marking a decline of 13 points from the previous year and positioning Australia as the second lowest performer among the 14 countries surveyed.
The survey, which surveyed 18,200 office workers worldwide, including 1,000 Australians, uses a five-point scale to diagnose healthy working relationships and divides respondents into ‘Healthy’, ‘Caring’ and ‘Critical’ groups.
Loyalty erodes quickly
The data reveals troubling trends in employee engagement. Fewer employees are proud of their company, would recommend it as a great place to work, or see themselves staying for another two years. The decline extends across leadership effectiveness and people-focus, with employees reporting less consideration and connection to the organization’s purpose.
“The traditional employment model is broken. Global disruption, economic pressures and changing workplace expectations have created an environment that feels more demanding and less rewarding,” said Brad Pulford, HP’s Managing Director for Australia and New Zealand.
Workers in the financial, professional services, manufacturing and education sectors all experienced double-digit declines in their Work Relationship Index scores. Even business leaders were not immune, suffering a sharp 15-point decline that reflects the pressures of navigating a challenging business environment.
The erosion of workplace satisfaction stems from two critical weaknesses: purpose and recognition. Only 44% of Australian knowledge workers say their work gives them a sense of purpose, while only 39% feel they receive adequate recognition for their contributions.
Pressure and interchangeable mounting
More than half of Australian workers have experienced significant workplace changes in the past year, ranging from cost-cutting measures and redundancies to shifts to hybrid working arrangements. These transitions have taken their toll, with 58% of employees reporting that demands and expectations from employers have increased.
The increasing pressure comes at a time when employees are already feeling disconnected from their work and questioning their long-term commitment to their organization.
AI offers hope
Despite the bleak outlook, technology and artificial intelligence emerge as bright spots in the research. The report shows that 77% of Australians now use AI at work, with 31% using it on a daily basis. This growth in AI adoption is increasingly driven by older generations, with baby boomers overtaking their younger counterparts.
The impact of good technology investments is significant. Employees who work for companies that invest in providing the right tools and AI are up to five times more likely to have a healthy relationship with work.
However, the research emphasizes that technology alone is not a panacea. It is most powerful when used carefully as part of a broader package of consistent, people-centered workplace changes.
What employers should do
Because many factors that lead to satisfaction are within an organization’s control, leaders can take immediate action to reset workplace relationships. The research outlines a practical employer playbook for 2025 that goes beyond conversations about pay and employment conditions.
Key recommendations include increasing frequent, specific recognition tied to company values and results, making hybrid collaboration fairer by designing time in the office around collaboration rather than presenteeism, and protecting focus by reducing tool proliferation and context switching to help grow meaningful work time.
When it comes to AI implementation, organizations must provide clear guardrails, training, and role-relevant use cases so that artificial intelligence improvements work rather than overwhelm them. Perhaps most importantly, companies must equip managers to create clarity, balance workloads, and maintain regular, high-quality check-ins with their teams.
“This is a wake-up call for every employer in Australia. Despite the pressures around us, the drivers of fulfillment are largely employers: how we lead, how we recognize people and how we put technology to work to restore focus,” Pulford said. “That is the future of work that Australians deserve: fair collaboration, time back for focus and AI that helps and never overwhelms.”
The research suggests that while economic pressures and global disruption have created challenging conditions, Australian businesses have the power to reverse these trends through thought leadership, meaningful recognition and strategic use of technology.
For organizations looking to retain talent and rebuild workplace relationships in 2025, the message is clear: the time to act is now, and the solutions are largely within their control.
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