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Will you get a pay rise this financial year?
After years of sedated salary growth, fresh research shows employers are more cashed up and ready to address skills shortages.
Will you get a pay rise this financial year?
After years of sedated salary growth, fresh research shows employers are more cashed up and ready to address skills shortages.
Key trends
According to national recruiter Hays, 13 per cent of people across all industries were not given a pay rise in the 2018-19 financial year.
A further 57 per cent received a rise of less than 3 per cent, with 21 per cent receiving a pay increase of between 3 and 6 per cent.
The remaining 9 per cent received a pay increase of more than 6 per cent.
The outlook this year
More employees intend to ask for a rise during their next pay review in the upcoming financial year. About 65 per cent of employees are expected to ask for a pay rise, which is higher than the 57 per cent that received one last year.
In 2019-2020, it is expected that only 4 per cent of employees will ask for a pay rise of above 6 per cent.
Are workers optimistic?
The gap between what employees want and what they expect to receive is large, according to Hays.
Hays notes that 27 per cent do not expect to receive any pay rise at their next pay review while 41 per cent expect less than 3 per cent.
However, 14 per cent of employees think they will receive more than 6 per cent, with 6 per cent of those expecting 10 per cent or more.
“Evidently, the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries,” said Hays director David Cawley.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they plan to curtail salary increases,” said Mr Cawley.
Skills shortages
According to Hays, over the past year, Australia’s skill shortages has intensified. The gap between the skills jobseekers possess and those employers want is widening.
Employers are worried about the impact the skills shortage is having on the operations of the organisation, with 70 per cent believing that the shortage is having an impact on the organisation as a whole.
While the skill shortages is affecting businesses, so is the turnover rate as employees seek salary increases or career progress somewhere else.
Hays states the solution to this problem could be skilled migration. It is believed that 57 per cent of employers would consider employing or sponsoring a qualified overseas candidate that meets the skills required for the organisation.
One negative for employees with this skills shortage is a renewed focus on attraction at the expense of retention. Employers are increasingly aware of what they don’t have, leading to 54 per cent of companies restructuring.
Top benefits workers want
- Flexible work practices are the most common non-financial benefit offered – by 83 per cent of employers – ahead of ongoing learning and development (offered by 70 per cent) and career progression opportunities (62 per cent).
- 67 per cent of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55 per cent of employers to all employees. This is followed by above mandatory superannuation (offered by 37 per cent of employers to all their employees), parking (33 per cent), bonuses (27 per cent) and private health insurance (26 per cent).
- Of the benefits offered to a select few employees, private expenses tops the list, with 70 per cent of employers offering it to a hand-picked number of employees.
- 68 per cent of employers said business activity had increased over the past year, with 70 per cent expecting it to increase in the next 12 months.
- 32 per cent intend to increase permanent accountancy and finance staff levels over the coming year. This exceeds the 10 per cent who say they’ll decrease staff levels.
- 70 per cent say skill shortages will impact the effective operation of their business or department in either a significant (28 per cent) or minor (42 per cent) way, up from 67 per cent last year.
- 54 per cent of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets.
- In skill short areas, 57 per cent of employers would consider employing or sponsoring a qualified overseas candidate.
The numbers game
It’s a good year to be an accountant, according to Hays, with 90 per cent of organisations looking to increase their current accounting stocks.
However, the value of these increases will fall eventually. Almost two-thirds intend to raise salaries of these employees at the lower end, with 41 per cent not planning to raise salaries at all.
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