Get used to 'sedate' salary rises

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Salary rises are still sedate across most industries and sectors in Australia, according to the latest annual salary guide from recruiters Hays.

Employers have a positive outlook on their businesses, have been hiring more people and investing in technology but are still cautious when it comes to pay.

Official numbers show wages growing at 1.8% on average, their slowest on record.

Some get better than the average and others get nothing at all.

The Hays survey shows 65% of employers will give a rise of up to 3% to staff in the next review, but 11% said won’t increase salaries at all.

The salary guide, now in its 39th year, shows that 19% of employers intend to award a salary increase of between 3% and 6%.

In the last 12 months, 15% of Australians asked for a pay rise but were declined. Another 17% were successful.

IT and Telecommunications tops the list of generous industries, with 20% of employers intending to award salary increases of 6% or more in their next review.

Advertising and Media employers have also become more free with rises, with 16% (up from 12%) expected to increase salaries above 6%.

“Despite rising headcounts, business activity and sentiment, a cautious approach to salary increases prevails,” says Nick Deligiannis, managing director of Hays in Australia.

“We’re seeing sedate salary rises across most industries and sectors, which is also at odds with other trends.

“For instance, employees are responding to rapid technological change by investing in their own skills development. They’re also more productive thanks to technology. Add the number of employers who say business activity has and will continue to rise, and such small salary increases will test the loyalty of employees.”

Employers report increasing turnover in staff, a sign of improvement in the job market.

About a third (32%) of employers say staff turnover has increased. Two thirds (65%), compared to 60% last year, are worried that skill shortages will impact the effective operation of their organisation in a significant (23%) or minor (42%) way.

Deligiannis says Australia’s strengthening economy, rising business activity, growing headcounts and skill shortages can’t be overlooked for too long.

“The piercing question then is how high will turnover reach before typical salary increases climb above 3%?” he says.

The Hays guide is based on a survey of more than 2,950 organisations, representing more than 3 million employees.

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