A looming “salary stand-off” is set to rock Australian workplaces with warnings that four in five professionals will look for a new job if they don’t receive a pay rise over the next 12 months that beats the skyrocketing cost of living, new research has revealed.
It comes as findings released in October showed The Great Resignation is set to slam Australian workplaces in the next six to 12 months with 2 million people ready to quit their jobs, due to burnout, fatigue and staff shortages.
Australians are watching their pay packets shrink while the price of food, energy, and housing continues to rise with many hoping a salary increase will offset these cost of living pressures.
But a new survey from recruitment firm Robert Walters shows a growing number of people are facing “real-term trauma” as pay rises increasingly fail to compare to rising prices.
Inflation has reached its highest level in three decades, data from the Australian Bureau of Statistics showed last month, hitting a whopping 7.3 per cent – meaning Aussies will be looking for a big boost to their salary to tackle soaring costs.
Want to stream your news? Flash lets you stream 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer available for a limited time only >
However, adding to fears of a looming stand-off, over half of employers said they do not expect to offer salary increases above inflation over the coming year.
Almost three quarters of Aussies agreed cost of living pressures would make them more likely to request a pay rise over the next 12 months.
More than half also believed maximising their earning potential was a greater priority than job security over the coming year, the research showed.
Finally, over two thirds said despite fears of a recession, it would not discourage them from seeking a change in roles.
Shay Peters, managing director of Robert Walters Australia & New Zealand, said the research findings are an early warning of a tipping point:
“We are fast approaching what appears to be the most complex and challenging recruitment environment in recent years – yet another blow to households already feeling the pinch as the cost of living climbs,” he said.
“Much has been made of the ongoing skills shortage in Australia, and the power it has given candidates seeking to secure bigger salaries and additional benefits.
“These inflationary pressures may now shift that dynamic, with the previous ‘at all costs’ approach from companies desperate for new recruits now offset by spiralling operating costs and energy bills.
“With the Reserve Bank of Australia using all available levers to bring down inflation, the days of surging salary offers may be behind us – for the short term at least.”
But it could create a recruitment crisis for desperate employers.
The research found 83 per cent of companies currently recruiting believe the cost of living will prove the central issue in pay negotiations.
Worryingly more than two thirds of employers expect the rising cost of living will make it harder for their organisation to retain talent.
Analysis from Robert Walters has shown the industries where a growing number of Aussies suffered terrible pay packet pain as their salary failed to keep up with the cost of living.
The worst impacted include remuneration managers, who’s $100,000 to $160,000 salary, has actually dropped by 3.7 per cent compared to the rising cost of living, while in-house lawyers who command $160,000 to $200,000 annually have also suffered 1.4 per cent drop.
Digital marketing managers, who enjoy salaries of between $120,000 and $150,000, were shafted by their employers — receiving no pay rise at all.
Then there were roles such as tax audit managers, who are paid $150,000 to $180,000, whose salaries rose by 3.1 per cent – less than double the rising cost of living.
Administration assistants, which are paid $66,000 to $82,000, saw their salaries rise by just 3.5 per cent well below soaring inflation, while finance analysts on $135,000 to $150,000 salaries jumped by 5.6 per cent.
Even a 6.3 per cent pay rise for HR advisers that are typically paid between $80,000 to $90,000 wasn’t enough to beat the rising cost of living.
Mr Peters said employers were increasingly fearful of losing fed up staff.
A whopping 97 per cent of the 1500 respondents in the survey said a minimum ‘fair’ pay rise during the current cost of living crisis would either need to match or surpass inflation.
Meanwhile, 65 per cent expect their employer to consider the rising cost of living when determining salary increases and bonuses over the next 12 months.
“Providing an environment in which people enjoy working will become even more vital when salary expectations cannot be met, with superior employee wellbeing a valuable advantage for organisations seeing their star staff offered wage rises elsewhere,” he said.
However, there were winners with some professions receiving eye-watering jumps in their pay packet.
Marketing directors, who are paid between $250,000 and $300,000, received on average a whopping 33.3 per cent pay rise, while chief financial officers at ASX-listed companies command salaries of $320,000 and $450,000 went up 28.3 per cent in the last year.
Other jobs to beat the rising cost of living include investment consultants, whose $110,000 to $140,000 pay packet jumped by 19 per cent in the past year, while supply chain officers on $85,000 and $110,000 enjoyed pay rises of 14.7 per cent.
Meanwhile, data architects, who earn between $180,000 and $250,000, increased their salaries by 10.3 per cent, according to the survey.
But Mr Peters added that all sides in pay talks must appreciate the pressure the other is facing if they are to reach a sensible balance
“Our survey shows there’s a fundamental disconnect between candidates and employers, and that will undoubtably cause increasing friction,” he said.
“Open and honest conversations are more important than ever, especially with the warning from the RBA that ever-increasing wage offers could drive inflation beyond current predictions.
“We’re finding that where organisations cannot increase salary offers, sign-on bonuses, additional training and boosted leave entitlements can encourage candidates to look beyond mere salary levels and towards an increased quality of life”.