- Two-thirds (66%) of employers will increase salaries by less than 3% when they next review;
- A further 12% expect to offer no increases;
- During the last year, 58% increased salaries by less than 3% while 20% gave increases between 3 and 6%.
Business activity and permanent headcounts may be rising, but according to the 2016 Hays Salary Guide 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, released today, just 22% of employees can expect a salary increase of three per cent or more in their next review. Instead the vast majority of workers (66%) will receive an increase of less than three per cent. The final 12% will receive no increase.
Professional services followed by financial services and construction, property & engineering employers will be at the front of the small group offering the biggest increases.
The Hays Salary Guide includes salary and recruiting trends for over 1,000 roles in 14 locations in Australia and New Zealand. It is based on a survey of 2,752 organisations, representing over 2.6 million (2,686,179) employees.
“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 & New Zealand. “Despite seven in ten employers expecting business activity to increase in the year ahead, and permanent headcounts also expected to rise, cost consciousness remains in vogue.”
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. 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. As Nick explains, “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.
“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.”
Other key findings:
• Almost two-thirds of employers (64%) experienced increased business activity over the past 12 months, with 70% expecting further increased activity in the year ahead;
• 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;
• 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;
• 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;
• 60% say skill shortages will impact the effective operation of their business or department.
Get your copy of the 2016 Hays Salary Guide by visiting www.hays.com.au/salary, contacting your local Hays office or downloading The Hays Salary Guide 2016 iPhone app from iTunes.
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