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Australians finally think pay rises are coming

Photo: William West/AFP/Getty Images

Australians see better opportunity ahead for a long overdue pay rise.

According to the CEB Global Talent Monitor, Australian workers expect a 2.5% rise in base pay, and 0.7% increase in bonuses, the highest level since 2011.

“The spike in pay expectations comes as business indicators, including employment, profitability and trade, have all seen growing momentum over the last quarter, buoying employee confidence,” says Aaron McEwan, HR advisory leader at CEB, now Gartner.

“After years of riding out low wage growth, workers are now hopeful that their base pay will start to see the flow-on effect from the positive business conditions surrounding them.”

Annual wage growth is running at a record-low of 1.9% a year, according to the Australian Bureau of Statistics’ Wage Price Index.

However, the CEB Global Talent Monitor survey in the second quarter of 2017 shows workers are already working harder to prove to their employers that their performance deserves recognition.

Discretionary effort rose 5% in the three months to June to 23%, putting Australian effort levels 6% ahead of the global average.

“The last five years have seen conversations around pay growth fall to the wayside as Australian organisations struggled to juggle budget constraints and limited funds,” says McEwan. “As a result, many Australian workers don’t know anything about pay processes.”

He says employers must educate employees on the practicalities of pay, such as how pay increases are calculated, time of year they’re likely to happen and how employees can go about asking for an increase.

“It’s important for managers to talk to employees and let them know how the process works, find out what they want and recognise the effort they are putting in,” he says.

“Not only can this improve engagement and job satisfaction, it can boost performance which can impact the bottom line.”

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