EMPLOYEES IN Australia’s resource-rich states continue to enjoy the good fortune of having the nation’s fastest-growing salaries and the lowest cost of living – but the differences in growth between these states and the rest of Australia is putting pressure on employers with a national workforce.
Employment costs across the country are moving towards a more even playing field, but this trend could lead to employment costs in the resource states outpacing the traditional hotspots of NSW and Victoria, said Rob Knox, leader of Mercer’s information product solutions business in Australia and New Zealand.
“The point is that any sustained difference in market pay movement may start to show up as a big difference – particularly with higher paid employees –creating an increasingly complex environment for employers managing a national workforce,” said Knox.
New South Wales workers remain the country’s highest paid, with employment costs 2.6 per cent above the national general median (NGM), with the cost of living – in particular rental rates – remaining higher in Sydney, the benchmark and most expensive city.
However, Western Australia is closing the gap, with employment costs now at 1.8 per cent below the NGM.
“Salary differentials paint an interesting picture,” Know said. “Historically, there has been a concentration of higher paid employees in Victoria and New South Wales, driven by a greater proportion of management and senior executive roles,” he said.
“However, in recent years the booming resources sector has driven rapid wage growth in Queensland, Western Australia and to a lesser extent South Australia.
“As a result we’ve seen some realignment, with wage levels in the resource rich states across the broader workforce reflecting more closely those of NSW and Victoria – although variability across industry sectors, job functions and job levels remain,” he said.