Australian HR Magazine Article.   Salaries still on the rise
By Craig Donaldson
 
DESPITE A slowing economy, employers have not yet hit the panic button, with a recent report finding that national salary movements have increased to 5 per cent over the past 12 months, and are expected to continue rising at this pace over the coming year.

While employers are tightening their belts in response to pressure on operating costs, salary movements for the same person in the same role, year on year, have broken the 4 per cent barrier after trending upwards for the past four years. This is up from the 4.7 per cent increases of just 12 months ago.

While employers are cognisant of the need to contain costs, they are also very aware that continued investment in talent management is needed because the demand for skills remains strong, supply pressures continue as a result of an ageing workforce and strong employment demand continues across many industries, according to David Abusah, broad-based performance and rewards leader in the human capital business for Mercer, which released the report.

“Salary movements are forecast to rise again by 5 per cent over the next 12 months; a sign that, despite a slowing economy and lower business confidence, tight labour conditions still exist. However, remuneration is only one part of the puzzle when competing for talent and the need to maintain a competitive and differentiated employment offer remains high,” Abusah said.

“The major differences between this slowdown and those of the past is that employers are now dealing with a more complex workforce than ever before. The workforce is ageing, is more mobile, has diverse generational preferences, and requires greater flexibility.”

In addition, he said, star performers still have numerous career opportunities even in a slowing market so employers cannot afford to be complacent and must balance any cost-cutting initiatives with targeted talent management investment.