Australia | Jun 09 2011
– Australian Institute of Management completes National Salary Survey
– Survey shows a skills shortage is generating increased wage pressures
– Companies are responding by becoming increasingly flexible
– Training and development programs also increasing
By Chris Shaw
The Australian Institute of Management (AIM) has completed the Large Companies edition of its 2011 National Salary Survey, the 47th year the survey has been conducted. AIM received responses from 506 companies throughout Australia, covering more than 250 job roles.
The main finding from this year's survey was pay pressures are rising, this in response to an ongoing skills shortage. As a result, AIM notes almost two-thirds of large companies indicated they would consider hiring staff from overseas in an attempt to overcome the shortage of skilled workers.
Unemployment has been low and has fallen further over the past 12 months, AIM noting as a result 49.7% of large companies in the survey have found it difficult to recruit some staff. The sectors in which recruitment was most difficult were Construction and Engineering, Sales and Marketing and Manufacturing and Technical Trade. Recruitment issues were most common at the Professional/Technical job level.
The 2011 survey shows 42.5% of large companies now have formal succession planning policies in place. These include policies related to staff selection for development, mentoring and coaching programs. The numbers compare to 36.8% of companies with such policies in 2010 and 31.7% in 2009.
The AIM survey also showed improved domestic economic conditions have made employees more willing to risk changing jobs, as average voluntary staff turnover for large companies increased to 12.6% in 2011 from 10.3% previously.
More than 52% of large companies reported increased permanent staff levels in the past year, well up from the 40.5% reporting such an increase in 2010. In contrast, only 27.3% of large companies reported a decrease in staff numbers in 2011.
More than 92% of large companies paid salary increases in 2010/11 for at least some employees, well up from the 73.6% that paid higher salaries in 2010. The AIM survey shows the average pay increase was 4.0%, higher than the 3.7% increase recorded in 2010.
Looking forward, AIM notes the survey suggests further improved staff employment and earnings prospects, as 83.6% of large companies expect to review salaries for at least some employees in the coming year.
As well, more than 56% of large companies expect an increase in permanent staff numbers in the coming year, while only 9.9% expect a decrease in staffing levels. This compares to 49.4% and 12.5% respectively in 2010.
With finding staff becoming more difficult there has been an increase in training and development efforts for existing employees. Around 63% of large companies now have a formal training policy, up from 58.2% in 2010.
Around 60% of large companies have a set training budget, with the survey indicating 42.9% of these companies anticipate an increase in the value of these budgets in the year ahead. This is up from 33.8% in the 2010 survey.
To help attract and retain employees large companies are becoming more flexible, offering new work arrangements across all levels.
This is important, as AIM NSW/ACT chief executive Dr David Wakeley notes “A tightening labour market, skills shortages and the likelihood of a rate rise all point to a wages blow out if employers can't find ways to keep good people without big wage hikes”.
With Western Australia booming and the disasters earlier this year across the Eastern Seaboard States creating unprecedented demand for skilled labour, this is putting pressure on wages according to Wakeley.
“And although pay will always remain an important factor, developing and implementing effective training, career development and succession plans at all levels across the organisation is key to attracting and retaining good people, Wakeley said.
In terms of pay trends, the survey showed higher average salary movements across all job families when compared to 2010. There was little variation in in annual average salary movements across job levels, as Senior Executives saw annual salary movement of 4.2% against Salaried Staff and Professional/Technical staff salary increases of 3.9%.
Looking ahead, the largest average pay increases for the coming year are forecast by the Construction and Engineering industry at 4.27%, while the lowest is the Manufacturing – Food/Beverage/Tobacco industry at 3.24%.
In location terms, Western Australia reported the highest average salary rise for 2010/11 at 4.7%, while the lowest increase was in South Australia at 3.1%. When compared to forecast salary movements reported in 2010, average salary forecasts for 2011/12 are the same or higher across all states. Queensland recorded the largest improvement in forecast figures between the two periods, rising to 4.1% from 3.7% previously.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
