Salary increases shrink nationally despite increase in pay rise requests



News

By Momoko Metham

Two thirds of Australians are planning to ask for a pay rise this year according to The Adecco Group’s 2020 Australia Salary Guide.

Those working in the IT sector are the most likely to ask for a pay rise in 2020, followed by manufacturing and business service sectors.

This is despite the size of pay rises shrinking nationally, with Australian employers indicating that the size of pay rises they expect to give this year has dropped.

Rafael Moyano, CEO of The Adecco Group in Australia said, “With so many of us planning to ask for a salary increase this year, it will be important for those hoping to increase their salaries to have a solid understanding of how to build a convincing case for a pay rise.”

In 2020, only one in three employers say they expect to increase workers’ salaries by 3 per cent or more, compared to almost half who said the same at the start of last year.

This represents the continuation of a downward trend from the past 12 months, with only about one in four Australian employers saying they actually increased salaries by 3 per cent or more in 2019, compared to one in three the year before.

Employees are becoming more aware of this downward trend, with the salary increase amount that workers are expecting to receive plunging since last year.

Only half of employees expect to receive a significant pay rise of more than 3 per cent in 2020, compared to 72 per cent last year.

Those working in the education sector were the most likely to expect a pay rise that was less than 3 per cent.

Despite employees’ reduced pay rise hopes, there is still a discrepancy in expectations, with only 37 per cent of employers planning to increase salaries by a significant amount this year.

This discrepancy reveals “a gap between the economy’s ongoing poor wage growth and Australians’ expectations for fair remuneration as their skills and contributions at work increase,” said Moyano.

The lack of wage growth is also expected to impact Australia’s ability to attract global professionals to work in Australia.

“It is understandably difficult to attract the best talent if we are unable to offer them strong growth prospects in the short to medium term,” said Moyano.

However, Moyano suggests that Australia’s poor wage growth could soon improve with the consideration of “open dialogue and transparency around salary increase expectations” for many employers.

Only half of employers hold annual salary reviews as a standard practice, with those in real estate the most likely to hold a review at 92 per cent.

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