AUSTRALIAN workers will be looking for new jobs as wages fail to keep up with the rapidly rising cost of living, but those employed in the property, infrastructure and energy sectors, salaries are expected to remain strong in the coming year – offsetting some of the inflationary impacts.
According to the latest Robert Walters Salary Survey, 78% of white collar workers expect to start looking for a new position if they don’t get a pay rise that surpasses inflation over the next 12 months.
Australian’s purchasing power is increasingly shrinking while the prices of essentials including food, energy and housing continue to skyrocket.
While many believed their salary would increase to help manage these pressures, instead this survey revealed many are facing a “real-terms trauma” as any pay rises received fall short of the Consumer Price Index (CPI).
The survey of almost 1,500 candidates and employers across the country found that at 56%, more than half of employers do not expect to offer such a salary increase.
97% of candidates responded that the minimum for a “fair” pay rise would either need to match or outpace inflation, with 65% expecting their employer to consider the cost of living crisis when determining salaries and bonuses over the next 12 months.
74% also responded that inflation would make them more likely to request a pay rise over the next year and 57% believed maximising their earning potential was a greater priority than job security over the next 12 months.
67% also said that fears of a recession when combined with the rising cost of living wouldn’t discourage them from seeking a change in position.
For employers and companies however, confidence in retention and recruitment practices is wavering in the midst of both a cost of living crisis and skills shortage.
“We are fast approaching what appears to be the most complex and challenging recruitment environment in recent years – yet another blow to households already feeling the pinch as the cost of living climbs,” said Shay Peters, managing director of Robert Walters Australia & New Zealand.
“Much has been made of the ongoing skills shortage in Australia, and the power it has given candidates seeking to secure bigger salaries and additional benefits.”
68% of employers surveyed expect that rising cost of living will make it harder for their company to retain talent.
“These inflationary pressures may now shift that dynamic, with the previous ‘at all costs’ approach from companies desperate for new recruits now offset by spiralling operating costs and energy bills,” added Peters.
“With the Reserve Bank of Australia using all available levers to bring down inflation, the days of surging salary offers may be behind us – for the short term at least.”
The survey has for the first time placed sector pay increases against CPI, revealing the impact of inflationary pressures on workers’ pay packages.
With CPI rising to 7.3% over the 12 months to the September 2022 quarter, anyone receiving a pay cut below that rate has received a “real-terms” pay cut.
Amongst the winners are managing directors in sales, marketing and communications, having received a salary increase of 33.3%.
Likewise CFO’s of ASX-listed accounting and finance companies saw a 28.3% increase, investment consultants (asset management) in the banking and financial services sector saw a 19.0% increase, supply chain officers in the procurement, supply chain & logistics sector a 14.7% and data architects (business intelligence) in the tech & transformation sector saw a 10.3% increase.
Meanwhile HR advisors with one to four years of experience in the human recourses and safety sector didn’t make the cut with a 6.3% increase.
Also falling below the CPI were senior business/finance analysts with a 5.6% increase, administration assistances with 3.5% and tax/internal audit managers with a 3.1%.
While digital marketing managers saw no increase and in-house counsel (with six years post-qualified experience) in the legal sector and renumeration managers in human resources and OH&S saw respectively declines of 1.4% and 3.7%.
“Our survey shows there’s a fundamental disconnect between candidates and employers, and that will undoubtably cause increasing friction,” said Peters.
“We’re finding that where organisations cannot increase salary offers, sign-on bonuses, additional training and boosted leave entitlements can encourage candidates to look beyond mere salary levels and towards an increased quality of life.”
In the property, infrastructure and energy sectors, demand is still strong and is expected to remain so in the coming year.
“That is playing some part in offsetting some of the impacts from rising inflation, although there are still many jobs seeing rises dropping below CPI across the sector,” said Peters.
Over the last 12 months roles that secured increases above the rate of inflation included senior project engineers, who saw a median increase of 24.1%, urban designers with a 23.3% rise, senior mining engineers with 21.2% and Interior designers with 16.1% and electrical engineers with 16%.
“Across 2021, there was a real push for design leads, and this continued into 2022 with an increase in the number of projects moving into the construction phase.
“What is changing is the demand for reliability engineers – which has really stepped up in the last few months. This indicates businesses are focusing more on minimising risks, even more so than in previous years,” said Peters.
Just like other sectors many roles secured wage increases that didn’t keep up with inflation rates, with mine managers falling short with a 5.6% increase and project engineers with 5%.
Likewise, maintenance/reliability/AI managers saw a 4.7% increase, while both superintendents and project engineers saw a median increase of 4.5%.
“Our survey indicates that candidates in this sector are being more selective about potential employers. People want to know more about an organisation’s internal culture, sustainability goals and future projects before they join a team,” added Peters.
While employers are increasingly concerned about retain staff while operations costs also rise in this inflationary environment, providing workers with flexibility may be a major advantage.
“Providing an environment in which people enjoy working will become even more vital when salary expectations cannot be met, with superior employee wellbeing a valuable advantage for organisations seeing their star staff offered wage rises elsewhere,” concluded Peters.
