In the competition for talent, premium wages are being offered for in-demand roles, causing existing staff in similar roles to head for the door
Talent shortages are driving employers to offer higher wages to attract employees for in-demand roles. A large majority (93%) of business leaders say they are adding an average 19% premium to starting salary wages, according to the latest research from Robert Half.
There’s one big problem (besides the fact that businesses must find the extra cash) - the incentives are leading to pay inequalities between new recruits and existing staff. Loyal, long-term employees can quickly become disgruntled when they discover that they are being paid less.
“Waiting for a tenured or loyal employee to identify and raise concerns over pay inequity before responding is likely to erode the trust, loyalty, and engagement of the employee at hand and creates the risk that they will already be half way out the door before their concerns are addressed,” says David Jones, Senior Managing Director Robert Half Asia Pacific.
Among 31% of existing Australian office workers, there is a perception - real or otherwise - that they are being paid less than new hires in a similar role. On the management side, 72% of business leaders have jumped to head off any departures, offering rises to employees who voice their dissatisfaction over salary inequities.
“Businesses that are serious about retaining their staff should be regularly benchmarking salaries across the organisation and maintaining a clear and transparent dialogue with each of their employees about their salary and role expectations. Ensuring existing staff are rewarded at the same rate as new employees could significantly reduce the risk of losing crucial knowledge and experience to more competitive external offers,” says Jones.
Nearly 60% of businesses are conducting regular pay audits and adjusting existing employees’ pay to align with market rates, according to the data and almost half are publishing salary ranges within new job postings.
As inflation and rising living costs continue to bite, pay remains the top priority among employees with 48% of those considering changing jobs, citing low salary as their reason for moving on.
