As we head into the New Year, the question on everybody’s lips is: ‘Will I get a pay rise next year?’ And, while the answer is most likely a ‘yes’, employees are being advised to lower their pay expectations for 2014.
Australia has managed to keep its head above economic waters over the past few years, with an outlook that’s significantly rosier than others. However, with the resources boom starting to lose steam and weak global conditions, wage increases have slowed down to a rate reminiscent of the GFC.
According to Michael Page’s Salary & Employment Forecast for 2013-14, salaries are set to rise on average by three to five per cent, with most employers indicating that increases will vary from employee to employee, according to performance.
The Forecast, which draws from the Michael Page national annual salary survey of over 1800 employers, also highlighted that bonuses and other employee benefits would become more important in attracting and retaining the right staff.
In some sectors, where skills shortages and competitor activity were high, employers understood the need to award above average increases in order to retain the best talent in the market.
Employers in the agency, digital, hospitality, property and construction, retail and technology sectors all agreed that higher wage increases were necessary to attract staff with in-demand skills and to reward outperforming employees.
Location also played into wage growth, with engineering professionals in Queensland and Western Australia able to command a higher salary than their counterparts in other states due to greater demand. Sales professionals in NSW were also awarded higher salaries than Victorian employees to match the higher cost of living.
Despite the low wage growth forecast, the average Australian salary is still set to stay above inflation, which is good news for all.
Apprentices will also come out on top in the new year, with the Fair Work Commission awarding significant pay rises to first and second year apprentices as a means to improve the retention rates of apprentices across all industries, including construction, manufacturing and hairdressing.
First year apprentices will receive a pay rise of 55 per cent of the relevant award rate, while second years will see an increase of 55 to 65 per cent of the award rate. For those over the age of 21 looking to start an apprenticeship, the increases will entitle them to 80 per cent of the tradesperson’s rate.
Minimum wage workers have also benefited from a mid-year wage increase, with an increase of 41 cents an hour.
As recruitment for the mining and resources sector weakens, fewer jobs are leading to more competition. As a result, employees are accepting lower salaries and reduced remuneration. This can also be seen in the narrowing gap between pay increases in the resources sector and the rest of the market.
In the legal sector, the large numbers of young, qualified hopefuls significantly outweigh available junior-level roles. This means that employers can cherry-pick the finest without necessarily paying top dollar, and pay increases will be heavily linked to the performance of the individual employee and the company as a whole.
With 49 per cent of employers expecting staff turnover in the next few months, as well as the acknowledgement that staff were most likely to leave to improve their salary, many businesses are looking towards bonuses and other means of remuneration to keep and reward their staff.
Bonuses will be awarded based on a combination of individual, team and company performance, with 60 per cent of surveyed employers stating that they would include bonuses as part of their remuneration packages.
Other benefits such as flexible working arrangements, mobile phones, parking, personal laptops and company cars were also high on the list of perks to help retain top talent.