AIM Media Release
Monday 24 May 2010
Small not beautiful for workers in WA
Small companies in West Australia (WA) got the second lowest average pay increase of just 3.9 per cent in the country in the past 12 months, 0.4 per cent lower than the national average and significantly lower than last year’s pay increases of 4.9 per cent, the nation’s leading survey of salaries and human resources trends reports.
But it will get better with small companies in the region forecasting an increase of 4 per cent in 2010/2011, 0.2 per cent above the national average, the Australian Institute of Management’s (AIM) National Salary Survey 2010 predicts.
Now in its 46th year, the AIM National Salary Survey is based on the responses of 750 companies, comprising large companies (546 contributors) and small companies (204 contributors) throughout Australia.
The survey also revealed signs of further negative fallout from the global economic downturn, with involuntary staff turnover rates increasing from 3.0 per cent to 4.8 per cent in the past 12 months. Interestingly, overall staff turnover rates in small companies (at 13.9 per cent) were notably lower than those recorded in the 2010 survey by large companies (15.5 per cent).
“While small companies kept a lid on pay rises and staff numbers in order to survive the worst of the economic downturn, as the economy improves the big challenge will be retaining staff without incurring big employment cost blowouts,” AIM WA’s Deputy Executive Director, Dr Shaun Ridley warns.
Looking ahead, the survey points to a more positive turnaround in staff employment and earnings prospects. Most small companies (92.9 per cent) expect to review salaries, for at least some employees, within the next 12 months. In addition, almost half (46.8 per cent) expect permanent staff numbers to increase, while only 9.0 per cent expect a decrease in permanent staff levels - down significantly from the 16.2 per cent of small companies that forecast a decrease in permanent staff numbers in the previous year’s survey.
Despite rising unemployment over the past 12 months, over one third (39.6 per cent) of small companies still reported difficulty recruiting some staff due to skill shortages. These difficulties were most commonly found recruiting at the Professional/Technical job level for Manufacturing/Supply/Distribution, Sales & Marketing, Finance/Accounting and Administration/Customer Service job functions.
“With the skills shortage tipped to worsen, employers need to move sooner rather than later to lock in their best and brightest in those sectors most susceptible to skills shortages,” Dr Ridley says.
Although pay will always remain an important factor, key to success in these sectors and indeed in all sectors will be the development and active implementation of training, career development and succession plans at all levels across the organisation for both retention and recruitment purposes and to ensure the organisation reaps the benefits from a training investment,” he adds.
Interestingly the survey found that when it comes to dedicated training budgets and succession planning, small companies appear to be getting the message with a marked increase reporting that they have both a dedicated training budget and formal succession plans in place, when compared to the 2009 edition of the survey.
Similarly the proportion of small companies that anticipate that their training budgets will increase over the next 12 months rose from 32.8 per cent to 39.1per cent. Only 7.9 per cent expect a decrease in their training budget over the next 12 months.
The 2010 survey also found that within those small companies that offer variable rewards, there has been a marked increase in the proportion of small companies offering company bonus schemes.
Highlights of pay trends within the 2010 AIM Survey of small companies include:
The highest annual average salary movement by job level was recorded for Senior Executives and Professional/Technical staff (4.5 per cent) while (other) Management had the lowest average salary rise (3.9 per cent). According to forecasts, Salaried staff will receive the highest pay rises in the year ahead at 3.9 per cent (although there is very little variation amongst the various job levels).
On a job family-basis, the highest average salary increase was recorded for the Information Technology job family, while the lowest increase was recorded for the Purchasing/Distribution job family. Average salary movements for 2009/2010 were lower than average 2008/2009 salary movements across all job families. The Finance/Accounting, Marketing & Sales and Administration job families recorded the largest decline in salary movements when compared to those reported in last year’s (2009) Survey (each 0.9 per cent lower).
Average forecast salary movement by job family ranged from 3.4 per cent to 3.8 per cent, with the highest increases forecast for the Finance and Accounting job family and the lowest for the Information Technology job family. The greatest decline in forecast salary movements, since those reported in last year’s (2009) Survey was for the Information Technology job family (0.7 per cent lower than the previous year’s forecast).
New South Wales/ACT and Victoria/Tasmania recorded the highest salary rise for 2009/2010 at 4.5 per cent, while South Australia/NT recorded the lowest (3.7 per cent). When compared to pay movements recorded in last year’s (2009) AIM Survey, South Australia/NT recorded the greatest fall (down 1.2 per on the 2009 reported movement).
- When compared to forecast salary movements reported in the 2009 Survey (for 2009/2010), average salary forecasts for 2010/2011 have decreased in all states except Victoria/TAS, with South Australia/NT recording the largest decrease in forecast figures reported between the two periods (1.5 per cent lower).
About the National Salary Survey 2010
A total of 750 private and publicly listed companies from a broad range of industries contributed to the 46th Australian Institute of Management’s National Salary Survey 2010. The Large Company (more than $10 million turnover) edition reports the data of 546 organisations, and the Small Company (less than $10 million turnover) reports from 204. For more information go to www.aimsurveys.com.au
For further information please contact:
Alex Quinn, Marketing Manager on (08) 9383 8088 m: 0431 091 118
To purchase a copy of the full National Salary Survey, please contact AIM WA’s bookshop on (08) 9383 8088.
Other Salary Surveys:
Salary Survey - Large Company Release 2010
Salary Survey - Small Company Release 2009
Salary Survey - Large Company Release 2009
View AIM Research