Electronics and IT industry records highest salary growth

Salary growth across most industries slowed in 2015 but the electronics and IT industry recorded the highest salary growth, according to the AIM 2015 National Salary Survey. 

The 2015 survey records the average salary movement as +3.4%, which is lower than the +3.6% recorded in 2014 and the lowest since 2003.

The mining and quarrying industry recorded the lowest average salary movement at 2.97%. 

The highest was the electronics and IT industry at 4.34%. All manufacturing categories recorded lower salary movements than last year. The largest average pay increases over the next 12 months are forecast in the electronics and IT industry, while the largest drop is forecast for the utilities industry.

Wavering business confidence and a tighter labour market means organisations have their hands tied when it comes to pay rises and need to be more creative to retain employees, said AIM Group Acting CEO Tony Gleeson. 

Employers are forecasting the average salary to drop a further 0.2 percentage points (pp) next year to +3.2%. “Lower pay movements across the board should not be the reason why organisations are losing their employees,” Gleeson said.

“Not all sectors experienced a decline and employers can expect to face increasing competition for professional staff whose skills are easily transferred to other organisations and sectors, such as business and professional services, who are known to reward the currency of skills.” 

Reward and retain

“Employers need to be creative when looking for ways to keep their people. When you consider how expensive losing employees can be, along with the loss of corporate knowledge and disruption to clients and employees, this should be a real focus for organisations in the year ahead,” Gleeson said. 

While there has been an increase in the number of organisations offering flexible work arrangements, this year’s survey highlights that fewer organisations offered variable rewards schemes to employees across all job levels. “Bonus schemes, profit sharing, performance- or project-based pay are types of variable schemes that are low-risk options with a huge upside for employees and productivity overall,” Gleeson said.

The survey finds the top two reasons why employees leave to take on another job are for a new challenge (80.4%) and limited career advancement opportunities (55.3%), followed by insufficient financial reward (44.7%) and conflict with their manager or other employees (26.6%). 

“The financial component of work is only part of overall job satisfaction. Employees need to feel connected to an organisation and have the opportunity to grow and develop,” Gleeson said. 

The survey highlights that of the top five human resources challenges posing the greatest risk to organisations, the need to develop effective leaders comes out at number one. 

“The good news is, more than half of respondents said if companies get leadership development right, then this could supercharge the business,” Gleeson said. 

Skill shortages and overseas recruitment

A weaker employment market means employers are looking offshore less to fill general skills gaps. Last year, 42.9% of companies reported difficulty recruiting some employees due to skill shortages; however, only 35.2% of organisations reported this difficulty this year.

However, there are still challenges for employers when recruiting for some jobs, most commonly professional technical roles and sales and marketing. The survey shows migrant workers are most commonly employed to fill professional technical positions (84.4%), with the highest percentage being from the UK (54.5%), Europe (excl UK; 41.5%), Asia (excluding China; 39.8%), South Africa (26.8%), North America (22.8%), New Zealand (19.5%) and China (12.2%).

“A third of people employed to professional technical and sales and marketing roles are migrants, reflecting the demand from organisations for specialist skills, mostly for project work. The high percentage of migrants from Europe also possibly reflects the desire of employees to leave the economic volatility of Europe for work opportunities in Australia,” Gleeson said. 

Employee numbers stabilising 

Employers are much more positive about the number of permanent employees in the coming year. In 2014, one in five (20.5%) organisations said they expected a decrease in permanent employees numbers, compared to just one in 10 (10.9%) in the 2015 survey. Half of organisations (49%) expect permanent employee numbers to remain the same in the coming year, up from 36.4% last year. This sentiment is good news for Australian organisations and a sign we may be seeing some stabilisation in the Australian workforce in the coming year, Gleeson said.

All states and territories except Victoria and Tasmania expect lower average salary movements in the coming year. Western Australia is experiencing the highest growth but anticipates the highest drop over the coming year. 

The AIM National Salary Survey is based on the responses of more than 557 organisations across Australia, covering more than 25,000 employees and 282 job roles.

Image caption: AIM National Salary Survey infographic.