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Australia – Employers cautious on salaries, finds Hays

04 June 2013

Employers in Australia are taking a cautious approach to salary increases in 2013-14 despite having a more optimistic outlook about business conditions for the year ahead, according to the latest Hays Salary Guide.

This shows that 40% of employers see the economy strengthening in the next 6 to 12 months and 68% predict increased business activity for their organisation. At the same time, 37% of employers plan to hire additional staff in the year ahead with most new hires to be full-time.

But despite tempered confidence, most employers plan salary increases of less than 3%, the survey of more than 1,600 employers found.

“In our 2012 survey only 27% of employers believed the economic outlook was strengthening but we have seen that group grow to 40% in our 2013 survey against a backdrop of continuing low interest rates and the recently falling Australian dollar,” says Nick Deligiannis, Managing Director of Hays in Australia and New Zealand.

“And 68% expect business activity to increase for their particular organisation over the coming months,” he added. 8% of employers surveyed plan to keep salaries on hold compared to 11% in 2012. But looking ahead, salary growth will be modest despite the expected growth in confidence in the economy.

Of the employers surveyed, 57% plan to increase salaries by less than 3% in the next salary review period. A further 32% of employers will increase salaries by 3% to 6%, 2% plan increases of 6% to 10% and only 1% plan pay increases of more than 10%. 

“Employers will need to manage employee expectations around salary increases carefully and ensure that their top performers feel rewarded if they want to retain their best staff,” said Mr Deligiannis.

When asked about permanent headcount over the next 12 months, 37% of employers plan to increase hiring activity with 83% reporting that these roles will be full-time. A further 20% plan more part-time staff  and 17% plan to increase their use of temporary/contracting staff.

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