AIM Media Release
Tuesday 18 May 2010
WA workers get biggest wage hikes
Large company employees in West Australia (WA) got the biggest wage hike in the country with a 4.6 per cent increase over the past 12 months, significantly above the national average of 3.7 per cent and ahead of the 2009/2010 forecast of 3.9 per cent made by companies in the region in the previous years (2009) survey.
And it gets better with large companies forecasting average increases of 4.4 per cent for 2010/2011, 0.8 per cent over the national average, the nation’s leading survey of salaries and human resources trends predicts.
Now in its 46th year, the Australian Institute of Management’s (AIM) National Salary Survey 2010 is based on the responses of 750 companies, comprising large companies (546 contributors) and small companies (204 contributors) throughout Australia.
The survey found that less than three quarters (73.6 per cent) of companies paid salary increases in the 2009/2010 year, which was significantly lower than the 96 per cent that did so in the previous 12 month period. And the average increase for those that did was 3.7 per cent – a figure lower than the average pay rise of 4.3 per cent awarded in the previous year.
Almost double the number of large companies reported a decrease in permanent staff levels in the past 12 months - 40.5 per cent - compared to 22.7 per cent in the 2009 survey.
Not surprisingly, involuntary staff turnover rates increased from 4.8 per cent in 2009 to 5.2 per cent in the 2010 survey, due largely to an increase in redundancy programs initiated during the economic crisis.
Looking ahead however, the survey points to a more positive turnaround in staff employment and earnings prospects. At least 90 per cent of large companies expect to review salaries, for at least some employees, over the next 12 months. In addition, around half (49.4 per cent) expect permanent staff numbers to increase, while only 12.5 per cent expect a decrease in permanent staff levels (down significantly from the 23.5 per cent forecast decrease expected in the previous year’s survey).
“As the job market continues to improve the big challenge is going to be finding ways to keep good people without incurring huge wage cost blowouts,” says AIM WA’s Deputy Executive Director, Dr Shaun Ridley.
For the past two years, it has really been an employer’s market but that is all about to change. Staff who may have tightened their belts in leaner times will again be on the hunt for new opportunities and bigger pay packets. Many employers will still have big cost pressures but the savvier ones will look at creative ways to motivate people, without offering big salary hikes”.
Despite rising unemployment in the past year, over one third (36.9 per cent) of large companies still reported difficulty recruiting some staff due to skill shortages. These recruiting difficulties were most commonly found in the Professional/Technical job level and within the Construction/Engineering, Sales & Marketing, Finance/Accounting and Technical/Trade job functions.
“And 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 attraction purposes and to ensure the organisation reaps the benefits from a training investment,” he adds.
And when it comes to dedicated training budgets and succession planning, large companies appear to be getting the message, with a notable increase in the proportion of large companies reporting to have both a dedicated training budget and formal succession plans in place, when compared to the 2008 and 2009 editions of the survey.
There has been a notable increase also in the number of large companies offering totally flexible salary packaging and an increase in the proportion of those offering some form of variable reward to employees (across job levels). As was the case in the 2008 and 2009 surveys, fewer employees in large companies are making additional superannuation payments above the SGC.
Highlights of pay trends within the 2010 AIM Survey of large companies include:
The highest annual average salary movement by job level was recorded for Senior Executives (3.8 per cent) while Salaried Staff had the lowest average salary rise (3.5 per cent). According to forecasts, Senior Management will receive the highest pay rises in the year ahead at 3.8 per cent.
On an industry-basis, the highest average salary increases were recorded for the Business & Professional Services industry (4.99 per cent). The lowest increases were generally reported within the various Manufacturing sub-groups (between 3.16per cent and 3.57 per cent). Business & Professional Services was the only industry to record an improvement in average salary movements since those reported in last year’s (2009) Survey. The largest decline in average salary movements over the period was reported for the Electronics/IT industry (down 1.5 per cent on pay movements reported in the 2009 Survey).
The largest average pay increases forecast over the next twelve months, are for the Banking/Finance/Insurance industry (3.95 per cent) and the lowest is forecast for the Hospitality/Recreation industry (3.14 per cent).
By job family, the highest average salary increase was recorded for the General Management and Finance & Accounting job families (both 3.8 per cent). The Engineering & Scientific and Administration & Other Specialists job families recorded the largest decease in annual salary movements, since those reported in last year’s (2009) Survey (both 0.7 per cent lower).
Forecast salary movements for 2010/2011 are generally around the same level as actual 2009/2010 movements, across all job families. The lowest forecast increase is for the Manufacturing/Supply/Distribution job family (3.4 per cent).
Western Australia recorded the highest average salary rise for 2009/2010 at 4.6 per cent, while New South Wales/ACT recorded the lowest (3.5 per cent). When compared to pay movements recorded in last year’s (2009) AIM Survey, New South Wales/ACT and Queensland recorded the greatest fall (down 0.8 per cent and 0.7 per cent respectively).
When compared to forecast salary movements reported in the 2009 Survey (for 2009/2010), average salary forecasts for 2010/2011 are the same or higher across all States except South Australia/N.T. (0.2 per cent lower), with Western Australia recording the largest increase in forecast figures reported between the two periods (0.5 per cent higher).
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 - Small Company Release 2010
Salary Survey - Large Company Release 2009
Salary Survey - Small Company Release 2009
AIM Research