Australian pay growth hits 12-year low, according to survey


This year’s average salary movement in Australia is +3.4%, 0.2 percentage points lower than last year and the lowest since 2003 – a survey has found.  

Image credit: User: Vichaya Kiatying-Angsulee
Image credit: User: Vichaya Kiatying-Angsulee

The Australian Institute of Management’s (AIM) National Salary Survey, now in its 51st year, has found that six in ten employees leaving an organisation are moving sideways into a similar role and more than four out of ten employees say the reason they leave an organisation is money.

The survey, which is based on the responses of more than 557 organisations covering more than 25,000 employees and 282 job roles, also found that almost half (49%) of the organisations expect permanent employee numbers to remain the same in the coming year, up from 36.4% last year.

It also revealed that employers expect the average salary to drop a further 0.2 percentage points next year to +3.2% due to wavering business confidence and a tighter labour market.

“Lower pay movements across the board should not be the reason why organisations  are losing their employees,” said acting CEO of AIM Group, Tony Gleeson.

“Employers need to be creative when looking for ways to keep their people. When you consider how expensive losing employees can be, along with the loss of corporate knowledge and disruption to clients and employees, this should be a real focus for organisations in the year ahead.”

The survey also highlighted that while there had been an increase in the number of organisations offering flexible work arrangements compared to 2014, fewer organisations offered variable rewards schemes to employees across all job levels.

“Bonus schemes, profit sharing, performance or project-based pay are types of variable schemes that are low-risk options with a huge upside for employees and productivity overall,” Gleeson said.

The survey has found that 8 out of 10 respondents said that pursuing a new challenge was the primary reason for taking on a new job, followed by insufficient financial return (44.7%) and conflict with their manager or other employees (22.6%).

“The financial component of work is only part of overall job satisfaction. Employees need to feel connected to an organisation, and have the opportunity to grow and develop,” Gleeson said.

According to the survey, 35.2% of companies reported difficulty recruiting some employees due to skill shortages – down 7.7% from last year’s 42.9% – which shows that employers are looking offshore less to fill general skills gaps.

However, the survey finds that employers are still facing challenges when recruiting for some jobs, most commonly professional technical roles and sales and marketing. It shows that migrant workers are most commonly employed to fill professional technical positions (84.4%) with the highest percentage being from the UK (54.5%), Europe (excl. UK) (41.5%), Asia (excluding China) (39.8%), South Africa (26.8%), North America (22.8%), New Zealand (19.5%) and China (12.2%).

“A third of people employed to professional technical and sales and marketing roles are migrants, reflecting the demand from organisations for specialist skills, mostly for project work. The high percentage of migrants from Europe also possibly reflects the desire of employees to leave the economic volatility of Europe for work opportunities in Australia,” Gleeson said.