The economic crisis is causing a slew of salary increase requests in Australia
With the global economy tightening and budgets struggling to make ends meet, employees are seeking higher salaries, rather than extended perks. A global survey of 32,000 workers conducted by ADP research entitled, ‘People at Work 2023: A Global Workforce View’ revealed that 83% of workers expect an average salary increase of 8.3% in 2023.
But some employees are expecting more than others.
Globally, 10% of workers expect a salary increase of more than 15% in the next 12 months, and 18% expect an increase between 10% and 12% in the next 12 months.
“Off the back of the candidate-driven talent market, we know employees have been proactively contacted by recruiters and companies offering them more inflated salaries for similar roles,” Alex Hattingh, chief people officer Employment Hero, said.
“This happens when there is a misalignment between supply and demand, the flow-on effect being that Australians feel underpaid in their current roles. The cost-of-living crisis has exacerbated matters further.
“Like everything with employment, it is about trust, transparency and having informed and respectful conversations. Benchmarking with useful data points such as industry standard salaries matched with responsibilities, is essential for employers to demonstrate to employees how they arrived at a certain pay grade.”
It all comes down to pay
The ADP Research Institute research report also discovered that when it came to naming the most important factor in a job it once again was salary with 61% stating that salary is no.1, followed by job security (43%), career progression (40%) and enjoyment of their work (37%).
“Pay is particularly important at the moment due to cost-of-living increases and the genuine need for employees to find ways to increase their income,” Shelly Johnson, human resource consultant, said. “But remuneration not a driver of job satisfaction engagement at work.
“Research from Mark McCrindle and Ashley Fell in their book ‘Work Wellbeing’ showed that millennials and generation Z employees are looking for purpose, growth, and great culture. So, focus on these areas. Find ways to invest in their growth and development. It doesn't have to be promotions - it can be finding them learning opportunities.
“Communicate your approach for remuneration and be transparent. Run a session with all employees to let them know how you review pay each year and the way decisions are made. By being upfront, you’ll increase trust. I’ve seen clients communicate the budget they set aside for annual increases and how they benchmark salaries against the market. The transparency really helps employees feel confident in the process.”
Are employee salary demands in touch with reality?
The report also found that 62% of workers believe they will get a pay raise in the next 12 months from their current employer, while 41% believe they will get a bonus during the same time from their current employer.
Heightened pay expectations, though, are not in line with the pay changes that employers have given: In the last 12 months, just 3% of worldwide workers received a pay increase of over 15%.
“It is important employers are clear on market trends and where they sit,” Vanessa Vershaw, founder of Reinvention Consulting, said. “Sell other aspects of the organisation that make it a workplace too good to pass up and a great place to work such as team culture, learning opportunities. Enable the candidate to design their own role and be co-create their future in the organisation in line with their future aspirations. Set the career pathway early.
“People these days are looking for a great experience as well as to be paid fairly. Organisations that are driven by a clear and compelling purpose are also leading the way in attracting and retaining key talent and many of these don’t pay well at all. People want their contributions to matter, to make a difference to something bigger than themselves and are prepared to forfeit the bigger bucks to do so to contribute to the greater good.”
No doubt the year ahead will see an interesting tussle between employers and employees over what constitutes a good salary and what entices people to either stay or leave.
