Business activity growing in Australia but for many salaries are not

by Ray Clancy on June 15, 2016

in Jobs in Australia, Money, Business and Finance

The jobs market outlook in Australia is positive but the chances of getting a decent salary increase less so, according to the latest research.

Some 66% of employers will increase salaries by less than 3% when they next review and a further 12% expect to offer no increases, says the latest Salary Guide from Hays Recruitment.

The data also shows that during the last year some 58% increased salaries by less than 3% while 20% gave increases between 3% and 6%.

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It says that while business activity and permanent headcounts may be rising, they are not translating into salary increases. With employers for the most part unwilling to loosen the purse strings, the recruiter warns that employees will start to take matters into their own hands.

According to the Guide just 22% of employees can expect a salary increase of 3% or more and professional services followed by financial services and construction, property and engineering employers will be at the front of the small group offering the biggest increases.

“Overall, it’s clear that employers remain reluctant to offer substantial increases unless absolutely necessary to secure a candidate with skills in short supply,” says Nick Deligiannis, managing director of Hays in Australia and New Zealand.

“Despite seven in 10 employers expecting business activity to increase in the year ahead, and permanent headcounts also expected to rise, cost consciousness remains in vogue,” he added.

According to Hays, over the last year 16% of employers offered no salary increases. Those who did receive a salary increase found that their wallets were not that much heavier. Some 58% received an increase of less than 3%, 20% saw their pay increase from 3% to 6%, and a lucky 6% received an increase of 6% or more.

But Hays warns employers not to be complacent, because employees are starting to take matters into their own hands. “Some 41% of employees say they’ll ask for a pay rise in their next review. Another 25% are as yet undecided about popping the salary question. Meanwhile staff turnover has already increased in 29% of organisations,” explained Deligiannis.

“With organisations adding headcount, business activity rising, and people more likely to say the economy will strengthen rather than weaken over the next six to 12 months, candidates are aware that skill shortages will intensify anew, particularly for highly skilled professionals, and they want their salaries to increase accordingly,” he pointed out.

The report also shows that 64% of employers experienced increased business activity over the past 12 months, with 70% expecting further increased activity in the year ahead and staff levels are up too, with 39% increasing permanent headcount during the last 12 months. This outstrips the 21% who decreased it.

Meanwhile, 40% intend to increase their permanent headcount in the year ahead, far exceeding the 13% who expect to decrease it and the use of temporary or contract staff will also increase for 21% of employers, exceeding the 12% who expect their use of such resources to fall.

The report adds that in light of salary expectations it’s ironic that 32% of employers say salary and benefits have a major impact on their employer brand, up from 25% last year and 60% say skill shortages will impact the effective operation of their business or department.

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