Blogs

Are you in line for a pay rise this year?

 
Our Hays Salary Guide FY23/24 revealed that employers intend to invest in their people this financial year, with wide-ranging salary increases expected. Australia’s skills shortage has intensified, driving salary increases for most professionals this year. But with an upper limit to the raise organisations can offer, it’s vital to consider the whole employee experience on offer, not just the dollars. 

Employers are feeling confident – 65 per cent are expecting business activity to increase in the year ahead and almost half (46 per cent) are looking to increase permanent staff levels. 

While many organisations are optimistic in their hiring plans, the challenge of finding the right talent remains. We found that 88 per cent were still experiencing skills shortages and 78 per cent say this shortage will impact the effective operation or growth plans of their organisation. 

To counter these challenges, and to address the rising cost of inflation, organisations are expanding headcounts and increasing both the number and value of salary increases – we found that 95 per cent of employers intending to increase salaries. An increase from last year’s 88 per cent and 67 per cent the year before.  

Money matters: The top factors driving salary increases

Competition for talent is one factor driving salary increases, with three quarters of employers admitting the skills shortage has meant that they are increasing salaries above their planned values.  
  
Employers are also sensitive to the cost of inflation on their employees’ engagement, wellbeing and satisfaction. In fact, almost four in five say it’s reasonable to expect pay rises to keep up with inflation. 

Will I receive a pay rise in my next review?

To see if your skills are in line for a salary increase this year, visit our online Salary Checker to view the highest, typical and lowest salaries for your job. 

How much should my salary increase each year Australia

Annual wage growth across the board in Australia averages out at three per cent, but what a reasonable pay rise looks like differs by industry. Some industries grow at a faster rate than others, with Australian employers also basing salary increases on other factors such as company policies, as well as your specific job role and performance.

Skills shortage drives up employee expectations

The skills shortage has made 64 per cent of professionals more confident to ask for a pay rise. In fact, many have already benefited from the demand for their skills through a salary increase (30 per cent), new job (13 per cent) or both (19 per cent).

Despite the increased salary boost employers intend to offer, employee expectations continue to not be met. Today 91 per cent of professionals believe their performance and the demand for their skills merits an increase greater than three per cent.

In fact, an uncompetitive salary is the top factor motivating new job searches this year (48 per cent), ahead of the rising cost of living (46 per cent), a lack of promotional opportunities (42 per cent) and a poor management style or workplace culture (38 per cent).

Design the employee experience 

To bridge the expectation divide, employers and professionals should look beyond just the numbers and consider the entire employee experience being offered.

While employers recognise the importance a competitive remuneration offering, professionals are seeking more than just financial compensation. The benefits on offer, the company culture and the wider organisation’s values and purpose also drive decisions on who to work with and for.

Employers are prioritising benefits that help them build a skilled and capable workforce to improve productivity, customer satisfaction and profits. Training, ongoing learning and development and career progression opportunities are the top three benefits they provide.

While employees do look for benefits that support their skills and career growth, they also value those that support their work-life balance. For instance, training is the top benefit that employees look for, while career progression is valued by 60 per cent and more than 20 days’ annual leave is sought by 58 per cent. Rounding out the top five are ongoing learning and development (46 per cent) and wellbeing leave (30 per cent).

If your salary increase fails to live up to expectations, consider whether additional emotional salary benefits can bridge the divide.

If all else fails, consider your options 

Of the skilled professionals we surveyed, 18 per cent will actively seek a new job this financial year, with another 37 per cent open to opportunities. Many of these professionals have upskilled to improve their job search prospects. Over the past year, 58 per cent developed new technical skills, 46 per cent soft skills and 34 per cent digital skills. Over one-quarter (29 per cent) gained higher or additional qualifications.

In some organisations, demand for skills to fuel growth has never been higher. For professionals with skills in demand, the time may be right to consider an external move to speed up your progression. If you are considering your options, we invite you to share or update your CV so we can bring opportunities to you directly. 

Incentives employers can offer when regular pay rises can't keep up with inflation

The first prize for rewarding employee performance is to simply offer wage growth that keeps up with the cost of living inflation, especially with the tight labour market making talent difficult to replace. However, sometimes a pay increase like that isn't reasonable when considering the performance of the business as a whole.

When this happens, there are a few steps employers can take to continue being a competitive option in the industry:

Performance bonuses

Employers can offer performance-based bonuses that are tied to achieving specific goals, targets, or milestones. These bonuses can be an effective way to reward and motivate employees based on their individual or team performance.

Flexible working arrangements

Greater flexibility in working hours or the option to work remotely helps employees save on commuting costs, reduce stress, and achieve a better work-life balance, which indirectly compensates for the impact of inflation.

Additional perks and benefits

Employers can enhance their employee benefit packages with non-monetary perks. These can include increased paid time off, improved healthcare coverage, gym memberships, wellness programs, childcare support, and educational assistance.

Download the Hays Salary Guide

Our annual Hays Salary Guide  is based on a survey of over 6,900 organisations and more than 7,300 skilled professionals. Download your copy to access typical salaries and insights relevant to your job and career path. 


About this author

Nick Deligiannis, Managing Director, began working at Hays in 1993 and since then he has held a variety of consulting and management roles across the business. In 2004 he was appointed to the Hays Board of Directors. He was made Managing Director of Australia and New Zealand in 2012.

Prior to joining Hays, he had a background in human resource management and marketing, and has formal qualifications in Psychology.

Follow Nick on LinkedIn

blog promo menu

Popular articles

Jobseeker

How to get on with your co-workers

How to advance your career in 2024

Choosing your own adventure

Discover the must-have skill employers seek today

Meet your new work colleague: ChatGPT

How (and why) to create boundaries at work

Afraid of changing jobs? How to challenge your fears

How to advance your career in 2023

How to change careers

Are you in line for a pay rise this year?

Disappointing pay rise? Here is what to ask for instead

9 simple wellbeing tips when working from home

Lifestyle hacks for increase focus, productivity, energy and joy

Holiday job search myths and realities

"The Great Resignation": Why are so many thinking about quitting?

How to upskill when working from home

How to answer difficult interview questions

8 interview questions for teaching position

Don't meet all the requirements - 3 reasons to apply


Employer

Closing the Loopholes Bills 2024: What it means for you and your employees

Deploying a Managed Service Provider

Advancing gender equality in construction

How to build a curious team

Key quarterly trends in the world of work

Regulatory issues impacting your workforce

Case Study: ACF

Salary transparency is coming, are you ready for it?

Are you still using the same strategies in a bid to secure skills?

Could a four-day work week win the talent you need?

AI has taken a big leap forward, what now?

Recruitment challenges for 2023

Why businesses need to prove their sustainability credentials

Defining the new equation in the world of work

Employee retention: What's your game?

Manage Salary Expectation Gap

Budgets are tight how can I recognise and reward my staff?


View all blogs