Australian employees have hit pay dirt with salaries rising by an average of 6 per cent, on the past year as the tight labour market ramps up remuneration
AUSTRALIAN EMPLOYEES have hit pay dirt with salaries rising by an average of 6 per cent, on the past year.
According to new research, HR professionals were at the vanguard of the pay rises, with human resources jobs among the biggest earnings increases at 7.3 per cent.
The rise in pay across the board reflects an increasing reliance on using increased pay to retain staff, Jairus Ashworth, managing director of CSi – which carried out the study of more than 54,000 employees – said. “This breaks the pattern we have seen over the past few years of contained salary increases and the use of non-financial methods to retain staff,” he added.
Rising pay levels have also been driven by increasing voluntary staff turnover. According to CSi, while attrition rates have been relatively static in recent months, June saw a 2 per cent rise in voluntary turnover, or staff leaving jobs of their own accord. The voluntary staff turnover rate now stands at 15.1 per cent for the period June 2005-06 after being at 13.1 per cent for the periods December 2004-05 and June 2004-05.
However, while their table-topping and above average 7 per cent pay rise could be good news for their bank balances, HR professionals need to keep an eye on their budgets. “In light of these new figures, HR professionals are going to have to be very clever about the way they spend their salary budgets,” said Ashworth.
While the recent report is among the first pieces of evidence that the tight labour market is pushing up salaries, it’s a trend that Ashworth expects to continue. “There are no clear signs that the current economic, business and market conditions are going to change in the near future,” remarked Ashworth. “As such, HR professionals should invest time, energy and resources into developing and implementing remuneration strategies and practices that will assist their organisation through this period of tight labour market conditions and contained salary spending.”
However, he added, the increases look set to continue, albeit at a slower pace. “A 4 to 5 per cent increase on total salary spend in the coming financial year is not unrealistic. We are seeing organisations employ a variety of methods to ensure their total salary spend is kept under control,” said Ashworth. “For example, organisations are investing in training and development for existing staff, rapidly promoting lower level employees into higher level roles as they become vacant, recruiting staff with fewer qualifications or less experience and lowering head count to increase the salary spend available to existing staff.”
