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Mercer Australia has released its Total Remuneration Survey 2022 (TRS), revealing how Australian salaries, turnover rates and inflation are all increasing, and what affect this has on the workforce.
According to the TRS, engineering, information technology (IT), and sales and marketing are offering new hires increased wages in a bid to fill empty roles. Project engineering candidates are being offered wages that are 22 per cent higher than people already working in that position. Some IT roles are also showing inflated wages, with salaries jumping up to 16 per cent above “base salary”.
Head of market insights and data at Mercer Pacific, Chi Tran commented: “Voluntary attrition is rising to its highest point in five years. When you consider the fact that sectors such as IT and engineering are offering higher-than-average base salaries for new hires, it is easy to understand why we’re experiencing such movement in the market.”
Mercer has revealed how industries plan to increase salaries in 2023 across the board, with employers set on 3 per cent, which is unchanged from 2022. The industries that are predicted to see the biggest salary growth from 2022 to 2023 are life sciences, technology, and mining and metals, at 3.5 per cent each.
Employee turnover is another trend that has seen a noticeable spike in 2022. Over 36 per cent of businesses saw increased turnover, up from 16 per cent in 2021. Mercer believes employer expansion is affecting this, as 37 per cent aim to expand in the next year, compared to 30 per cent in 2021.
Client engagement manager, digital and insights at Mercer Pacific, Nithya Abraham said: “Pay is a tricky negotiation at the best of times; often, workers will not raise the issue with their employer but simply walk away to a higher paying role.”
Hiring and retention have also become increasingly difficult, as 64 per cent of respondents said they are having trouble, up from 43 per cent last year.
However, most businesses are still not factoring the rising cost of living into salaries. Only 22 per cent of respondents said they were increasing wages to reflect inflation. This may be why voluntary attrition is at its highest in five years. In 2021, more than a million Australians switched employers, the largest amount in the past decade.
Ms Tran continued: “Rising inflation is causing businesses to assess operating costs across the board, including the costs of delivering benefits programs. But these programs shouldn’t be on the chopping block. Employers should be flexible in exploring valuable tools that drive productivity and support their people.”
According to Mercer, the hardest jobs to recruit and retain are IT, engineering, science, sales, marketing, and project management. The TRS says digital marketing is of high demand as businesses increasingly try to expand digital presence.
Ms Tran noted that salaries aren’t the only thing a company can offer employees: “We know that for most employees, it’s never been all about the money. Even today, notwithstanding the current economic climate and war for talent, employers must continue to take a holistic approach to the employee experience that understands and responds to their employees’ appetite for different rewards and benefits.”
“From financial guidance counselling to caregiver benefits, parental leave policies to corporate discount programs, there are many ways to attract and retain high-performing talent without blowing out remuneration budgets,” she explained.
Mercer listed some other ways employers can provide for staff, as salaries struggle to keep up with inflation (which the TRS says is expected to rise 6 per cent).
- Get creative with rewards.
- Place emphasis on non-financial compensation.
- Review and refresh rewards philosophy.
According to Mercer’s Global Talent Trends 2022-23, 38 per cent of HR professionals said their aim was to improve company rewards, such as leave, discounts, and flexibility, in order to increase retention.
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Turnover in human resources refers to the process of replacing an employee with a new hire. Termination, retirement, death, interagency transfers, and resignations are just a few examples of how organisations and workers may part ways.
Jack Campbell
Jack is the editor at HR Leader.
