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Small business to face wage containment struggle

Small businesses look set to face an ongoing struggle to contain wages in 2011, according to the 2011 Australian Institute of Management (AIM) National Salary Survey.

The survey, which based on the responses of 190 companies throughout Australia, covering over 120 job roles, revealed the vast majority (83.2 percent) of small companies paid salary increases in the 2010/2011 year for at least some employees, compared to 76 percent in the previous survey period.

This result is echoed by the finding that 93.8 percent of small companies expect to review salaries, for at least some employees, over the next year.

“A tightening labour market, skills shortages and the likelihood of a rate rise within the next few months all point to a wages blow out if employers can’t find ways to keep good people without big wage hikes,” AIM New South Wales/Australian Capital Territory Chief Executive David Wakeley said.

With added pressures to contend with, flexible work arrangements is just one of the strategies small businesses are beginning to adopt in order to retain good employees.

“Many employers will have big cost pressures, so savvier employers are seeking creative ways to motivate people, without offering big salary hikes,” Wakeley added.

Pay trends uncovered in the 2011 AIM Survey include:

  • There was minimal variation in annual average salary movements across job levels, with the highest annual average salary movement recorded for Management and Senior Management (4.2 percent), while Salaried Staff and had the lowest average salary rise (3.9 percent).
  • By job family, the highest average salary increase was recorded for the Marketing & Sales and Information Technology (each 4.4 percent).
  • Forecast salary movements for 2011/2012 are generally around the same level as actual 2010/2011 movements, across all job levels and job families. The highest forecasts are for the Professional/Technical and Senior Executive Job Level and Marketing & Sales and General Management Job Families (each 3.8 percent).
  • By location, QLD and NSW/ACT recorded the highest average salary rise for 2010/2011 at 4.6 percent and 4.5 percent respectively, while WA recorded the lowest (3.6 percent).
  • When compared to forecast salary movements reported in the 2010 Survey (for 2010/2011), average salary forecasts for 2011/2012 are higher for NSW/ACT and SA/NT, with SA/NT recording the largest improvement in forecast figures reported between the two periods (from 3.1 percent to 3.9 percent).
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