Results revealed from AIM's National Salary Survey for 2015

Date: 
Thursday, May 7, 2015

Six in ten employees leaving an organisation are moving sideways into a similar role and more than four out of ten employees say the reason they leave an organisation is about money.

They’re some of the findings in this year’s AIM National Salary Survey, now in its 51st year. The survey is based on the responses of more than 557 organisations across Australia, covering more than 25,000 employees and 282 job roles.

In the 2015 survey, the average salary movement is +3.4%, which is lower than the +3.6% recorded in 2014 and the lowest since 2003. There was an increase in some sectors, such as IT and business and professional services.

Employers do not expect the situation to improve, forecasting the average salary to drop a further 0.2 percentage points (pp) next year to +3.2%.

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

“Lower pay movements across the board should not be the reason why organisations are losing their employees,” Mr Gleeson said.

“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,” he 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,” Mr Gleeson said.

Variable rewards offered?

2015

2014

Yes to all job levels

38.2%

38.1%

Yes to some job levels

46.1%

46.4%

None offered

15.8%

15.5%

*Variable rewards surveyed were: performance-based pay, company bonus scheme, profit sharing, hiring and retention incentives and sales commissions.

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,” Mr 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,” Mr Gleeson said.

Top five human resources challenges

Challenges that pose the greatest risk

Challenges that hold the greatest potential benefit

Developing effective leaders

49.4%

57.0%

Engaging and motivating employees

36.4%

50.8%

Attracting talent

36.4%

39.7%

Managing poor performance

35.3%

35.8%

Retaining talent

33.2%

38.5%

 

 

 

 

 

 

 

 

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 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,” Mr Gleeson said.

Country/Region

2008

2009

2010

2011

2012

2013

2014

2015

United Kingdom

54.1%

60.9%

64.1%

60.9%

57.7%

57.6%

56.3%

54.5%

Other European

32.8%

32.7%

38.7%

35.9%

35.9%

37.7%

39.1%

41.5%

Other Asian

45.1%

38.5%

34.5%

37.2%

40.1%

41.1%

41.4%

39.8%

South Africa

36.9%

33.3%

32.4%

30.8%

32.4%

28.5%

23.4%

26.8%

North America

13.1%

17.9%

18.3%

19.9%

12.7%

15.2%

18.0%

22.8%

New Zealand

19.7%

23.7%

23.9%

19.9%

30.3%

23.2%

28.1%

19.5%

China

5.7%

9.0%

9.2%

9.0%

10.6%

7.3%

8.6%

12.2%

Other Countries

18.9%

15.4%

17.6%

14.7%

20.4%

21.9%

17.2%

15.4%

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 expect a decrease in permanent employees numbers, compared to just one in ten (10.9%) in the 2015 survey.

Half of organisations (49%) expect permanent employees numbers to remain the same in the coming year, up from 36.4% last year.

“Half of the organisations surveyed believe employee numbers will remain the same – a significant improvement on 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,” Mr Gleeson said.  

Highlights of pay trends within the 2015 AIM Survey

Salary increase forecast by state

State

2015

2016 (forecast)

New South Wales / ACT

+3.3%

+3.2%

Victoria / Tasmania

+3.2%

+3.2%

Queensland

+3.4%

+3.2%

South Australia / Northern Territory

+3.6%

+3.2%

Western Australia

+3.9%

+3.4%

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.

Salary movements by job type

Job type

2015

2014

General management

+3.4%

+3.7%

Finance and accounting

+3.4%

+3.5%

Marketing and sales

+3.4%

+3.5%

Manufacturing, supply and distribution

+3.3%

+3.4%

Human resources and industrial relations

+3.6%

+3.6%

Information technology

+3.5%

+3.7%

Engineering/science

+3.4%

+3.7%

Admin and other specialists

+3.2%

+3.3%

 

 

 

 

 

 

 

 

 

 

 

 

Compared to the 2014 survey, average salary movements are lower across all job families except for human resources and industrial relations job family, which are unchanged.

Salary movement by industry

Industry

2014

2015

Agriculture, forest, fish, farm

+3.77%

+3.32%

Mining/quarrying

+3.49%

+2.97%

Construction/engineering

+4.02%

+3.48%

Manufacturing – food/beverage

+3.67%

+3.50%

Manufacturing – petrol/chemical

+3.96%

+3.87%

Manufacturing – metal/auto

+3.22%

+3.05%

Manufacturing – other

+3.14%

+3.02%

Electronics/IT

+3.70%

+4.34%

Distribution

+3.80%

+3.50%

Wholesale – machine

+3.71%

+3.14%

Wholesale - other

+3.74%

+3.77%

Banks/Finance/Insurance

+3.91%

+3.49%

Business and professional services

+3.87%

+3.92%

Hospitality and recreation

+3.76%

+3.36%

Government, institutions, social

+3.21%

+3.37%

Utilities

+4.88%

+3.59%

Retail

+3.31%

+3.13%

Other

+3.61%

+3.64%

“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.”

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 industries, while the largest drop is forecast for the utilities Industry.

About the AIM National Salary Survey

Now in its 51st year of publication the AIM National Salary Survey is the oldest and one of the largest and most comprehensive surveys of its type in the Australia.  The survey is based on data from 25,000 employees and 557 organisations, covering 282 positions, across 18 industry groups.

To find out more or to order yourself a copy, please visit www.aim.com.au/nss