Despite a slowing economy, employers have not passed these concerns onto employee's pay packets, according to Mercer's latest remuneration study. The study shows that national salary movements have increased to 5% over the past 12 months and are expected to continue rising at this pace over the coming year.
 
Mercer's 2008 Market Issues Survey of over 250 companies found that while employers are tightening their belts in response to pressure on operating costs, salary movements for the same person in the same role, year on year, have broken the 4% barrier after trending upwards for the past four years. This is up from the 4.7% increases of just 12 months ago.
 
David Abusah, broad-based performance & rewards leader within Mercer's human capital business, said while employers are cognisant of the need to contain costs, they are also very aware that continued investment in talent management is needed as the demand for skills remains strong; supply pressures continue as a result of an ageing workforce; and strong employment demand continues across many industries.
 
"Salary movements are forecast to rise again by 5% over the next 12 months; a sign that despite a slowing economy and lower business confidence, tight labour conditions still exist. However, remuneration is only one part of the puzzle when competing for talent and the need to maintain a competitive and differentiated employment offer remains high," Abusah said.