The news that Australia recorded an average 3.7% wage growth last financial year may be welcome news for the nation’s hip pocket, but the figures may also indicate that in the competitive market, it will take more than high wages to retain the top talent.
Economists have said the boost in wage points was higher than expected, and highlights the strength in the jobs market. New figures from the Australian Bureau of Statistics (ABS) show wages grew by 1% alone last quarter – ahead of economist expectations.
One economist commented that the growth in pay shows demand for labour is relatively healthy. “The acceleration in wage growth shown in today’s data is a solid outcome for the broader labour market and fits with the overall theme that although the unemployment rate has ticked a few tenths higher during 2012, the labour force remains relatively healthy,” JP Morgan economist Tom Kennedy wrote in a note on the figures.
What’s more, private sector wages continued to outpace public sector pay growth over the past year. Not surprisingly mining sector workers were afforded the largest average wage rise over the past year, coming in at 5.2%.
The ABS figures coincide with the news that retention of staff remains the number one talent concern for CFOs and finance directors. According to new research from finance and accounting recruitment firm, Robert Half, a whopping 85% are concerned about losing top performers to other job opportunities in the next year. Given the strong outlook for wage growth, combined with the tight talent market, HR must focus on building loyalty through an effective orientation process, setting clear expectations and providing ongoing training and feedback.
Three quarters of finance executives believe the number one factor in early departures comes down to poor cultural fit.
Specific reasons cited as indicating a poor fit included:
an inability to meet expectations
inability to integrate with the team
not meeting the employee’s expectations
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