'Attraction and retention will be key'
Employers across Australia have expressed concern about losing staff to higher-paying employers, as a new report revealed that salary remains the top motivation behind employee departures.
Findings from Morgan McKinley's 2023 Salary Guide Australia revealed that 63% of employers believe they will lose staff to other organisations with higher earning potential.
And their hunch could be correct, as the report also revealed that 59% of employees are planning to look for a new job in the first half of the year, citing the following reasons:
"The appetite to hire top talent shows limited signs of weakening in the future, and professionals are showing a propensity to change roles," Dominic Bareham, managing director of Morgan McKinley Australia, said in a statement.
To respond to employees' needs, 67% of employers said they offered higher-than-anticipated salaries to attract new staff over the past 12 months, while 73% admitted to hiking ages to retain existing staff in the last year.
"Generally, salaries increased in 2022 as a result of candidates demanding more and employers responding to secure the talent they need. This was largely driven by the closed borders and large organisations not being able to rely on consultancies to bring in offshore talent, particularly where expertise was required," Bareham said.
This year, 48% of employers said they are already expecting salaries to increase, while 33% are expecting some form of bonus payout. Previously, a report from Willis Towers Watson revealed a 3% projected salary increase for Australian employees this year.
Morgan McKinley's report also arrived at a time when many employers are struggling to fill in vacancies amid a tight labour market, with the unemployment rate staying at a record-low 3.5%.
According to Bareham, many employers are "acutely aware" of the current "candidate-driven market in which salary packages can easily become inflated."
"However, they have tried to be firm on not hiking salaries and getting out of step with existing bandings," Bareham said. "In many markets where a skills shortage remains, candidate attraction and retention will be key, as will a focus of stability and offering benefits outside of high salaries."
According to the report, employers can boost their chances in retention and recruitment by offering the following benefits:
