Now here's some good news...salaries are finally starting to rise
After a continuing decline in Australian salary movement since 2012, the 2018 National Salary Survey (NSS) has found an increase in wage growth from 2.8% to 2.9%.
The recent report released by the Institute of Managers and Leaders (IML) this month has revealed a rise in salary movement for the first time in six years.
Despite increasing only 0.1% from 2017, the result forecasts stabilised salary growth in coming years after more than half a decade of declining wage movement.
Now this is good news for our economy and for our property markets.
Not surprisingly the strongest boom in wage growth is being seen in the business and professional services industry.
Workers are expecting a 3.99% pay rise in 2018 and a further 4% forecasted in 2019 – an 18% spike in growth from 2017 and more than double the national Consumer Price Index (1.90% in 2018).
Conversely, the largest drop in salary movement was seen in fast-moving consumer goods manufacturing. The sector’s workers should expect 16% in their pay rises by 2019
2018 also sees a shift in the origins of Australia’s migrant workforce.
The proportion of organisations employing UK and North American staff have dropped dramatically with 10.2% less workplaces hiring UK nationals, and 7.2% less hiring North Americans.
However, despite the declining migrant workforce, 7% more businesses are employing talent from Europe and 4% more from China, indicating the rising need for cross-cultural competency in business sectors.
The migrant workforce is also seeing a trend towards long-term employment with a 3.1% drop in businesses hiring overseas workers for less than two years.
This is against the steady movement towards a casualisation of the Australian workforce in recent years.
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Migrant workers aren’t the only professionals bucking the casualised workforce trend.
Organisations are recruiting more permanent staff with 51% of businesses reporting increases in permanent staff in the past 12 months.
The movement towards stable employment is forecasted to continue with more than half (51.4%) of organisations expecting to hire more permanent roles in the next 12 months, while the number of temporary and contract staff are expected to remain the same.
In the HR sector, the NSS has found a rise in voluntary staff resignations (10%) after a steady six-year decline in voluntary employee turnover.
Reflecting the increase in salary growth, 5% less workers are citing traditional issues such as insufficient pay.
However, the workforce is seeing a hike in staff demanding more flexible start and finish times and flexible work arrangements.
The top reasons for staff leaving remain the same, with 76.5% seeking new challenges, 59.2% citing lack of career advancement opportunities and 21% frustrated with the lack of professional development and training.
These findings mirror the top human capital challenges with developing effective leaders reported by 57.4% of organisations as the challenge that poses the greatest risk to their business.
Other top issues include engaging and motivating employees, attracting talent, managing poor performance and retaining talent.
Commenting on the recently released findings, IML’s General Manager of Corporate Services and Research Sam Bell said,
“The salary growth increase is welcome news for Australian workers and bucks a five-year downward trend. This reversal was well illustrated in last week’s Federal Budget, where the strengthening Australian economy is causing a tightening labour market, and applying upward pressure to salary growth.”
“It’s clear from the 2018 NSS results that employers are increasingly required to place more emphasis on staff development to attract and retain talent for their organisations”, said IML Chief Executive, David Pich. “Organisations really must start to think about seriously investing in visible career advancement opportunities and professional development for their employees. This creates more effective and high-performing employees, as well as happier staff who will be better able to contribute to the growth of the business in the long term.”