Salary movements across Australia have significantly slipped – sitting down at the GFC-level of 3.1%.
“We are seeing a considerably more conservative approach to remuneration than we have in most of the last decade,” Garry Adams, leader of talent business in the Pacific market at Mercer, said.
The low salary movement is in contrast to The Australian Chamber of Commerce and Industry finding business confidence has reached a three year high of 50.8 points. This figure is based on expectations of sales, profitability and investment outlook. Any mark above 50 represents an expansion in business confidence as opposed to a contraction, and is the first time it has done so since 2011, News Ltd reported.
Mercer’s study also revealed that construction and engineering sectors are facing lower increases for the first time since 2009, while retail, pharmaceutical, education and technology industries are experiencing higher premiums.
“We are finding smaller organisations have recorded lower turnover, higher salary increases and can be more fluid during times of change. However, larger organisations have a higher rate of pay and broader reward offering but they may be faced with greater administrative burdens in implementing change,” said Adams.
Organisations that are unable to offer higher salaries but still wish to increase productivity should turn their attention to other benefits and improving workplace culture. Nicholas Barnett, CEO of InSync Surveys, feels better engagement and clear vision are better drivers of retention than higher pay. He told HC employers can more effectively retain staff “by empowering and supporting employees, not by paying them more”.
He added that it is easier to say “People left because we didn’t pay them enough,” rather than saying “they left us because we didn’t empower them”.