Salaries for new employees have bounced back after an all-time low in the first half of 2016, returning to a positive in August to offer new employees salaries 0.2% on average above existing employees, a figure likely to exceed 3% by the end of the year.
This is in stark contrast to June 2016 when the Australian market was paying 4% less for new employees on average compared to existing employees – a decline of almost 2% compared to the end of 2015.
This latest data comes from Mercer’s Know Your Market Hub, which provides live insights to employers about remuneration trends in the Australian marketplace, the current rewards environment and sentiment, and key economic data affecting pay decisions. Analysis on the Hub is based on data from 800 Australian employers representing 300,000 employees.
The positive result signifies a robust improvement in overall market conditions compared with the previous three months, returning to moderate stability after the economic effects felt prior to and during the Australian Federal Election and Brexit.
Modest employment growth is anticipated over the second half of 2016, with the 2016/2017 salary forecast remaining at 3%. Even though the overall market is 3%, on an industry basis there are still some lagging behind, such as Mining & Metals (1.0%) and Retail & Wholesale (2.4%), and some moving ahead such as Banking & Financial Services and High-Tech (both 3.5%).
“Mercer has always been data-rich in terms of providing remuneration trends, but it is our insights that can really make a difference for a company setting their remuneration budget and planning for their future workforce,” said Raphaele Nicaud, a Partner at Mercer.
“We pride ourselves on being workforce economists and our new online Hub is a natural extension to the data our clients know they can rely on us for. Our online Hub offers the most up-to-date data and a real currency of insights with monthly updates.”
Mercer’s Know Your Market Hub also features a unique Remuneration Sentiment Index. The Index measures the general feeling of the remuneration and jobs market and provides valuable insights to employers on how to set and manage expectations, and engagement of their workforce when reviewing their pay levels.
See: Majority of Australian HR managers Plan to Maintain Current Staff Levels over Next Six Months
The Index was at 2.3% in August, up from -1.3% in March, indicating that market conditions would remain the same over the next six months, compared to last month, and a shift away from clients expecting ‘worsening’ conditions by the beginning of next year.
The Hub also looks at gender equity in the workforce. The overall gender pay gap saw females paid 3.0% on average less than their male counterparts, with the pay gap widening as females progress in to management roles.
“Despite overwhelming evidence that engaging female talent is a key driver of competitive advantage for business, workplace gender diversity remains a challenge,” said Nicaud.
“While business confidence has shown some signs of softening, actual business conditions remain healthy. We expect the current stable economic conditions to remain or improve in the foreseeable future.”
Our current forecast for general job market growth points to a slight strengthening and improvement in the market. We will continue to monitor this trend and should it continue, will likely result in salary movements moving past the 3% mark by as early as the end of 2016.
Also read: Only 51% Couples in Australia Have Comfortable Level of Retirement Income
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