Two-thirds (65 per cent) of employers will give skilled professionals a pay rise of less than 3 per cent in their next review and 11 per cent will not increase salaries at all, according to the 2018-19 Hays Salary Guide.
Released today (Wednesday 16th May) and based on a survey of more than 3,000 organisations representing over 2.3 million employees, the 2018-19 Hays Salary Guide shows a further 18 per cent will give staff an increase of 3 to 6 per cent. Just 6 per cent will increase by 6 per cent or more.
Compared to their last review, when 14 per cent of employers gave no increases and 8 per cent increased by 6 per cent or above, the findings show that more professionals will receive an increase but the value of those increases will fall.
Employees however have higher expectations than employers for a salary increase. 17 per cent expect an increase of 6 per cent or more. A further 19 per cent expect an increase of between 3 to 6 per cent. At the other end of the scale, 25 per cent do not expect any increase and 39 per cent expect less than 3 per cent.
Employees have also prioritised a pay rise. Two-thirds (67 per cent) say a salary increase is their number one career priority this year. If their employer doesn’t offer a pay rise, almost half (48 per cent, up from 45 per cent last year) will request one.
“Despite a year of consistently strong vacancy activity growth, widening skill shortages and positive forward hiring intentions employers are, for the most part, keeping salary increases restrained,” said Nick Deligiannis, Managing Director of Hays in Australia & New Zealand.
“No wonder then that after years of sedate salary movements, a pay rise has become the number one career priority for skilled professionals this year. If their employer doesn’t offer a pay rise, they’re prepared to ask for one or start looking elsewhere. Already turnover has risen in 32 per cent of organisations and of the 46 per cent of professionals who intend to look for a new job in the next 12 months, 48 per cent cite an uncompetitive salary as a motivating factor.
“Interestingly, the intentions of employers suggest the tables are, ever so slightly, starting to turn. According to our survey data, more employers are willing to offer a pay rise this year compared to last. But the value of those increases is falling, which is a glaring impediment for widespread wage growth and is at odds with the expectations of professionals, who are inclined to think the value of their pay rise will be higher.”
The Hays Salary Guide also found:
- Professionals living in New South Wales and Western Australia are the most optimistic, with 17 per cent expecting to receive an increase of 6 per cent or more. This is followed by Queensland (16 per cent), Tasmania (15 per cent), Victoria and ACT (both 14 per cent);
- At the other end of the scale, 43 per cent of South Australian professionals expect no salary increase, as do 38 per cent of Northern Territorians and 29 per cent of Tasmanians;
- Advertising and media tops the list of most generous industries, with 13 per cent of employers in this field intending to award salary increases of 6 per cent or more in their next review;
- Professional services is second, with 11 per cent planning to increase salaries above 6 per cent, followed by construction, property & engineering (9 per cent), IT & telecommunications and hospitality, travel & entertainment (both 8 per cent), and financial services and mining, resources, energy and oil & gas (all 7 per cent);
- Business activity increased for 74 per cent of employers in the past 12 months, while 77 per cent expect it to increase in the next 12 months;
- 40 per cent foresee a strengthening economy in the coming six to 12 months;
- 47 per cent of employers expect to increase permanent staff levels in the next 12 months, far exceeding the 10 per cent who say they’ll decrease;
- Meanwhile 22 per cent expect to increase their use of temporary and contract staff, also exceeding the 11 per cent who anticipate decreasing in this area;
- 24 per cent of organisations now employ temporary and contract staff on a regular ongoing basis and another 42 per cent employ them for special projects or workloads;
- In the last 12 months, 16 per cent of Australians asked for a pay rise but were declined – a further 18 per cent asked for a pay rise and were successful;
- The success of the latter perhaps explains why 48 per cent say they intend to ask for a pay rise in their next review. A further 24 per cent are as yet unsure;
- 32 per cent of employers say staff turnover has increased in their organisation over the last 12 months;
- 67 per cent of employers, compared to 65 per cent last year, are worried that skill shortages will impact the effective operation of their organisation or department in a significant (26 per cent) or minor (41 per cent) way;
- 67 per cent of employers offer flexible salary packaging. Of these, the most common benefits offered to all employees are salary sacrifice (offered to all employees by 57 per cent of employers), above mandatory superannuation (41 per cent), parking (33 per cent), private health insurance (29 per cent) and bonuses (27 per cent);
- 70 per cent of employees have access to flexible work practices, 56 per cent receive ongoing learning & development, 45 per cent career progression opportunities, 36 per cent health and wellness programs, 32 per cent over 20 days’ annual leave and 30 per cent financial support for study.
The annual Hays Salary Guide is now in its 40th year.
Get your copy of the 2018-19 Hays Salary Guide by visiting www.hays.com.au/salary