SKILL SHORTAGES may not be translating into higher across-the-board salary increases, but HR professionals have no reasons to complain, a study by Mercer Human Resource Consulting has found
SKILL SHORTAGES may not be translating into higher across-the-board salary increases, but HR professionals have no reasons to complain, a study by Mercer Human Resource Consulting has found.
Salaries for HR professionals in the Mercer Market Issues survey were slightly better than those for the overall market and there were strong increases for HR managers, senior HR generalists, compensation and benefits managers, occupational health and safety managers and training managers.
The results indicate national salary movements have remained steady at 4.3 per cent despite a strong economic climate and tight labour market.
For HR professionals the figures indicate that organisations will need to have a workforce of committed and capable employees, who can grow with the business.
“Realising that they cannot afford the costs associated with losing top talent, bringing in new hires or the associated lost opportunity costs, organisations are investing more in the drive to secure the commitment of their employees,” said Ken Gilbert, head of the total rewards group at Mercer.
“A key component of this is providing the career development opportunities. Employees view these as rewards that will keep them with the organisation over time.”
Amid record levels of high employment and growing skill shortages, Gilbert believes that employers are realising there is an opportunity to utilise their reward models.
Despite the pressure on pay rates companies are focusing on other elements in delivering a total rewards package for employees, he added.
“Companies are looking at the total value proposition for employees, and are starting to focus employees on the benefits they can get from career development opportunities which the company provides,” he said.
“This means companies can generate a greater return on investment from their workforce – particularly high performing talent and those with potential.”
The Mercer study also found that the top reward issues facing HR professionals include attraction and retention of staff; improving the linkage between performance and reward; and setting performance measures and targets. Positioning pay policy against the market; linking variable reward to business strategy; managing/administering remuneration reviews; and managing pay differences across poor and exceptional performance were also hot issues.
Further, jobs in certain sectors have experienced salary growth above the average market movement. These include mining and petroleum up to 5.5 per cent, pharmaceuticals 4.9 per cent, energy 4.8 per cent and construction/engineering up to 4.7 per cent.
Civil engineers, project managers, foremen/supervisors and trades people such as plumbers, electricians, brick layers, carpenters and joiners in particular are making more than a year ago. Geologists and finance professionals and other individuals within organisations that are crucial to the success of their business have also received higher than average pay increases in the 12-month period to July 2005.
“While holding general pay rises to a moderate level, employers are offering more to strategic roles, high performing individuals, and those with key skills which are critical to the success of the business,” said Gilbert.
Salary growth was also evident in customer services up 1.2 per cent to 6.0 per cent. Corporate services (up 0.8 per cent to 5.8 per cent), sales (up 0.4 per cent to 4.1 per cent) and technical (up 0.6 per cent to 4.0 per cent) were the stragglers.
Industries tracking in line with overall market movement included healthcare and education sectors. Retail was one of three sectors tracking the most behind the market regarding pay movements.
Dented by sluggish consumer spending, retail pay structure movements were down 4 per cent. Community services and manufacturing were also slower at 4 per cent each.
