WA Workers - top of the pack
Large companies in Western Australia (WA) passed on pay increases significantly above the National average, the nation’s leading survey of salaries and human resources trends finds.
This year’s average pay increase for large companies in WA is 4.7 per cent, as compared to the National average of 4.0 per cent, and is slightly higher than the 4.6 per cent increase recorded for large companies in the region over the same period last year, the Australian Institute of Management’s (AIM) National Salary Survey 2011 reports.
The momentum is expected to continue in the next 12 months, with large companies in WA predicting an increase of 4.5 per cent, well above the forecast National average of 3.8 per cent and 0.1 per cent higher than average pay movement forecasts reported for WA companies in the previous year’s Survey.
Now in its 47th year, the AIM National Salary Survey 2011 (Large Companies edition) is based on the responses of 506 companies throughout Australia, covering over 250 job roles.
The survey indicates that attracting and retaining staff, while containing employment costs, will be a key challenge for Australian organisations over the next 12 months.
The survey found that over one-half (52.6 per cent) of large companies reported an increase in permanent staff levels in the past 12 months - compared to 40.5 per cent in the 2010 survey. Only 27.3 per cent of large companies reported a decrease in permanent staff levels (compared to 39.6 per cent in the 2010 Survey), while 20.1 per cent of large companies reported no change in staff numbers.
Low and falling unemployment levels over the past twelve months are likely to have contributed to the around one-half (49.7 per cent) of large companies reporting difficulties in recruiting some staff due to skills shortages, a figure which is significantly higher than the 36.9 per cent of large companies that reported difficulties recruiting some staff in the 2010 Survey.
These recruiting difficulties were most commonly found at the Professional/Technical job level and within Construction & Engineering, Sales & Marketing, Manufacturing & Technical/Trade job functions.
Around two-thirds (65.5 per cent) of large companies in the 2011 Survey indicated that they would consider hiring staff from overseas to tackle the problem of skills shortages in some areas (up from 62.2 per cent of large companies in the 2010 Survey).
Findings from the Survey also suggest that with improved domestic economic conditions, employees are more willing to risk changing employers, with the average rate of voluntary staff turnover recorded for large companies in the 2011 Survey increasing, from 10.3 per cent to 12.6 per cent.
In order to help retain staff, the vast majority (92.2 per cent) of large companies paid salary increases in the 2010/2011 year for at least some employees, which was significantly higher than the 73.6 per cent that did so in the previous 12 month period. And the average increase for those that did was 4.0 per cent – a figure higher than the average pay rise of 3.7 per cent awarded in the previous year.
Looking ahead, the survey points to further improved staff employment and earnings prospects.
93.6 percent of large companies expect to review salaries, for at least some employees, over the next 12 months. In addition, over one-half (56.6 per cent) expect permanent staff numbers to increase (up from 49.4 per cent of large companies in the previous year’s survey), while only 9.9 per cent expect a decrease in permanent staff levels (down from the 12.5 per cent of large companies that forecast a decrease in permanent staff in the previous year’s survey).
Difficulties in finding staff, has met with a renewed effort to train and develop existing employees. The majority (63.2 per cent) of large companies report having a formal training policy - up from 58.2 per cent in the 2010 Survey. In addition, over one-half (59.9 per cent) of large companies report having a set training budget, with 42.9 per cent of these companies anticipating that the value of their budgets will increase over the next 12 months - up significantly from 33.8 per cent in the 2010 Survey. Only 6.3 per cent of large companies (with set training budgets) expect the value of their training budget will decrease over the next 12 months.
42.5 per cent of large companies now have formal succession planning policies in place, including policies around the selection of staff for development, mentoring and coaching programs. This is up notably from the 36.8 per cent of large companies that reported having formal succession plans in the 2010 Survey and the 31.7 per cent of large companies that reported doing so in the 2009 Survey.
In order to help attract and retain employees, large companies are also becoming increasingly flexible. Compared to the previous year’s (2010) survey, a greater proportion of large companies in the 2011 Survey reported offering flexible work arrangements across all job levels.
“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,” says Dr Shaun Ridley, Deputy Executive Director, AIM WA.
“For the past two years, it has really been an employer’s market but that is changing. Many staff who stayed put during the down turn are now on the hunt for new opportunities and bigger pay packets. And yes, many employers will have big cost pressures, so savvier employers are seeking creative ways to motivate people, without offering big salary hikes.
“Demand for skilled labour here in Western Australia and in Queensland will create a conundrum for the Prime Minister’s recently announced initiative of getting two million unemployed and underemployed people back to full time work.
“The Federal Government three-prong strategy designed to tackle escalating skills and labour shortages is on the money, particularly the 10 per cent increased in skilled migration for 2011-12 and measures designed to add greater flexibility in encouraging temporary business migration.
“But nobody should understate the size and depth of the skills and labour shortages. Booming Western Australia and the disaster ravaged Eastern Seaboard States are creating unprecedented demand for skilled labour and this in itself is going to put greater pressure on wages.
“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,” Dr Ridley adds.
Highlights of pay trends within the 2011 AIM Survey of large companies include:
- There was little variation in annual average salary movements across job levels, with the highest annual average salary movement recorded for Senior Executives (4.2 per cent), while Salaried Staff and Professional/Technical Staff had the lowest average salary rise (both 3.9 per cent).
- On an industry-basis, the highest average salary increase was recorded for the Business & Professional Services industry (5.21 per cent). The greatest improvement in salary movements (when compared to the previous year’s Survey) was recorded for the Wholesale – Machinery/Automotive industry (up from 3.69 per cent in the 2010 Survey to 5.07 per cent in the 2011 Survey). The Banking/Finance/Insurance and Hospitality Industries were the only industries to record average salary movements that were lower than those recorded in the previous year’s (2010) Survey.
- The largest average pay increases over the next twelve months are forecast by the Construction & Engineering industry (4.27 per cent), while the lowest is forecast for the Manufacturing – Food/Beverage/Tobacco industry (3.24 per cent).
- By job family, the highest average salary increase was recorded for the General Management, Finance & Accounting and Human Resources & Industrial Relations job families (each 4.1 per cent). Average salary movements recorded in the 2011 Survey were higher than average salary movements recorded in the 2010 Survey across all job families.
- Forecast salary movements reported in the 2011 Survey (for 2011/2012) are higher than forecasts reported in the 2010 Survey (for 2010/2011), across all job families. The lowest forecast increase is for the Administration & other Specialists job family (3.7 per cent).
- By location, WA recorded the highest average salary rise for 2010/2011 at 4.7 per cent, while SA recorded the lowest (3.1 per cent). When compared to pay movements recorded in last year’s (2010) AIM Survey, NSW recorded the greatest improvement (up from 3.5 per cent to 4.0 per cent), while SA recorded the greatest fall (down from 3.8 per cent to 3.1 per cent).
- When compared to forecast salary movements reported in the 2010 Survey (for 2010/2011), average salary forecasts for 2011/2012 are the same or higher across all States, with QLD recording the largest improvement in forecast figures reported between the two periods (from 3.7 per cent to 4.1 per cent).
About the National Salary Survey 2011
A total of 506 private and publicly listed companies from a broad range of industries contributed to the 47th Australian Institute of Management’s National Salary Survey 2011 (Large Companies edition). The Large Company edition is based on organisations earning more than $10 million annual turnover.
For more information please contact:
Director, Marketing and Public Relations, AIM WA
T: (08) 9383 8015 M: 0431 091 118
To purchase a copy of the full National Salary Survey, please contact AIM WA’s bookshop on (61 8)9383 8088.
Other Salary Surveys
Salary Survey - Large Company Release 2010
Salary Survey - Small Company Release 2010