This is why the person sitting next you is looking for a better job

Lionel Bonaventure / AFP / Getty Images

Corporate Australia is about to see a major reshuffle, with employers indicating they are about to hire again and more city workers saying they are seeking better-paying roles elsewhere.

And that may mean more pressure on employers to pay more, to both existing employees and new hires, as demand for talent increases.

Official numbers show wages growth at a record low in Australia. The Australian Bureau of Statistics wage price index increased by just 0.4% in the March quarter, leaving the annual rate of growth at 2.07%.

And that’s the average. Some will have little or no pay rise this year while others will have a bit more that 2%.

One theory for this is that there’s been a shift to part-time employment, meaning a measure of underemployment in Australia, because it’s cheaper for companies to operate like that.

However, there are early signs of improving demand for talent.

According to the latest salary survey at recruiting experts Hays, 40% of employers expect to increase permanent staff levels in the coming year.

Engineering, IT, human resources and distribution departments will see the biggest job growth.

On top of that, other data suggests a greater percentage than normal of those already working are looking for a move as a way of getting more into their pay packets in a market with weak annual increases.

Itchy feet

More than a third of Australia’s workforce is keeping an eye out for the next career move, according to the latest data from best practice insights and technology company, CEB.

“We haven’t seen this many workers looking for new roles since 2014,” says Aaron McEwan, HR Advisory Leader at CEB.

“Those who feel as though they have been in a professional holding pattern are readying themselves to capitalise on new career opportunities; but they won’t jump ship for just any role that comes along.”

“Our research shows that the top three drivers of attraction in Australia are work/life balance, location and respect.”

The domino effect

Nick Deligiannis, managing director for Australia at Hays recruitment, says the majority of employment activity is generated through the movement of people who already have jobs.

“It’s not necessarily new jobs being created but actually people moving on,” he told Business Insider.

“Once that happens there’s a domino effect where organisations have got vacancies and they need to be filled.”

He says the reason people might be looking to move now more than they were a year ago is that there are jobs available with 40% of employers looking to increase staff levels.

“It’s around confidence and it’s also about availability. The other thing from an employee point of view is that you are less scared to move now. There are more opportunities.”

Low wages

The other factor is wage stagnation, a lack of significant pay rises during the annual review process.

“It is definitely a low wages environment,” says Deligiannis. “People are thinking: My salary hasn’t really moved that much in recent times and I don’t really see that changing in the year ahead so therefore I will look elsewhere.”

Deligiannis says seven in 10 employers believe business activity will increase in the financial year ahead and that could mean the start of skills shortages.

“Over recent years Australia’s skill shortage certainly did relax as headcounts were frozen or closely monitored,” he says.

“But as our economy successfully transitions from the mining to the residential construction and services sectors that’s changing. Today we all need to recognise that with permanent job vacancies increasing the skill shortage will intensify anew, particularly around highly-skilled professionals.”

This will lead to salary pressure candidates and from existing employees who are aware of a competitive market for talent and who want to see their pay increase.

The 2016 Hays Salary Guide is based on a survey of 2,752 organisations representing 2.6 million employees.

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