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65% of employers to give pay rises in 2018, Hays finds

Two-thirds (65%) of employers will give skilled professionals a pay rise of less than 3% in their next review and 11% will not increase salaries at all, according to the 2018-19 Hays Salary Guide.

Released on Wednesday 16th May and based on a survey of more than 3,000 organisations representing over 2.3m employees, the 2018-19 Hays Salary Guide shows a further 18% will give staff an increase of 3 to 6%. Just 6% will increase by 6% or more.

Compared to their last review, when 14% of employers gave no increases and 8% increased by 6% 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% expect an increase of 6% or more. A further 19% expect an increase of between 3 to 6%. At the other end of the scale, 25% do not expect any increase and 39% expect less than 3%.

Employees have also prioritised a pay rise. Two-thirds (67%) say a salary increase is their number one career priority this year. If their employer doesn’t offer a pay rise, almost half (48%, up from 45% last year) will request one.

Nick Deligiannis, managing director of Hays in Australia & New Zealand, said, “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.

“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% expecting to receive an increase of 6% or more. This is followed by Queensland (16%), Tasmania (15%), Victoria and ACT (both 14%);
  • At the other end of the scale, 43% of South Australian professionals expect no salary increase, as do 38% of Northern Territorians and 29% of Tasmanians;
  • Advertising and media tops the list of most generous industries, with 13% of employers in this field intending to award salary increases of 6% or more in their next review;
  • Professional services is second, with 11% planning to increase salaries above 6%, followed by construction, property & engineering (9%), IT & telecommunications and hospitality, travel & entertainment (both 8%), and financial services and mining, resources, energy and oil & gas (all 7%);
  • Business activity increased for 74% of employers in the past 12 months, while 77% expect it to increase in the next 12 months;
  • 40% foresee a strengthening economy in the coming six to 12 months;
  • 47% of employers expect to increase permanent staff levels in the next 12 months, far exceeding the 10% who say they’ll decrease;
  • Meanwhile 22% expect to increase their use of temporary and contract staff, also exceeding the 11% who anticipate decreasing in this area;
  • 24% of organisations now employ temporary and contract staff on a regular ongoing basis and another 42% employ them for special projects or workloads;
  • In the last 12 months, 16% of Australians asked for a pay rise but were declined – a further 18% asked for a pay rise and were successful;
  • The success of the latter perhaps explains why 48% say they intend to ask for a pay rise in their next review. A further 24% are as yet unsure;
  • 32% of employers say staff turnover has increased in their organisation over the last 12 months;
  • 67% of employers, compared to 65% last year, are worried that skill shortages will impact the effective operation of their organisation or department in a significant (26%) or minor (41%) way;
  • 67% 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% of employers), above mandatory superannuation (41%), parking (33%), private health insurance (29%) and bonuses (27%);
  • 70% of employees have access to flexible work practices, 56% receive ongoing learning & development, 45% career progression opportunities, 36% health and wellness programs, 32% over 20 days’ annual leave and 30 per cent financial support for study.

The annual Hays Salary Guide is now in its 40th year.

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