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As cost-of-living pressures continue to plague Australian workers, new data suggests we might be in for another tough year. That said, this year wasn’t all bad news, as some roles came out well ahead of the growing costs.
Annual consumer price index (CPI) inflation was 5.4 per cent in September of this year, meaning anyone whose pay did not scale with inflation effectively received a “pay cut in real terms”, said Robert Walters.
We could be waiting some time for wages to creep up, as according to a prediction from the Reserve Bank of Australia, Aussies won’t experience real wage growth until the second half of 2024.
In a recent report from Robert Walters, all things pay this year and next year were considered. Let’s unpack the data and consider what’s in store for future wages.
Winners and losers
According to the report, the following professions soared well above annual inflation in terms of their pay increases:
1. Test analyst in the tech and transformation sector (16.82 per cent).
2. Supply chain manager in the procurement sector (15.15 per cent).
3. Credit controller in the accounting and finance sector (14.29 per cent).
4. Financial accountant in the wealth management sector (11.32 per cent).
5. Sponsorships and events manager in the sales and marketing sector (11 per cent).
On the other hand, the following roles were outpaced by inflation, meaning they suffered, on average, a pay cut in real terms:
1. Category manager in the procurement sector (3.17 per cent).
2. Accounts payable/receivable officer in the accounting and finance sector (0 per cent).
3. Business development manager in the sales and marketing sector (2 per cent).
4. Network architect in the tech and transformation sector (2.94 per cent).
5. Project manager in the resources and engineering sector (3.7 per cent).
6. HR change manager in the human resources and safety sector (5.13 per cent).
Predicting the future
Turning now to the future, the survey suggested the following trends are in store for 2024.
1. Modest pay growth
Looking forward to 2024, the survey found that inflation will likely continue to outpace pay rises across employers. Specifically, 58 per cent of Australian and New Zealand employers are not expecting to offer salary increases above inflation in 2024. Comparatively, 75 per cent of UK employers are planning on increasing their salaries by inflation only, and not more.
“This is bad news for employees,” said Robert Walters, “as it means typical incremental rises (same role, same company) are unlikely to keep pace with the cost of living”.
When pay increases are slower than inflation, there can be compounding financial effects. As noted in the Forbes Advisor: “Your pay packet is rising, but it buys less at the shops than it did before. It is an awful calculus.”
“Things are even grimmer for those who don’t use wages to buy their daily bread. If you have savings, they are likely to be going backward even faster than wages.”
That said, the RBA predicts inflation to decline over 2024 to a year-end figure of 3.3 per cent, while the International Monetary Fund predicts a more modest decline to reach 3.4 per cent by 2025.
Despite the modest wage predictions, 71 per cent of employees say they feel confident about the opportunities in their sectors. This is largely unchanged from last year. Perhaps more telling, though, is that the proportion of employees who report feeling “very confident” in their sector has more than halved in the last two years (from 38 per cent to 17 per cent).
2. Job changes
As one might expect, a high proportion (74 per cent) of employees are planning on changing roles in the next 12 months. Perhaps surprisingly, though, in light of modest wage growth and consequent cost-of-living pressures, only 22 per cent of those looking to change roles are doing so in search of a higher salary compared with 56 per cent last year. Far more (at 35 per cent) are looking to the door for greater opportunities for career growth.
Robert Walters chief executive Shay Peters lays this at the feet of external job market factors, making employees less optimistic when it comes to job hunting.
“When asking themselves the question: ‘Should I stay or should I go?’, employees are increasingly weighing up the risks versus the rewards, as increases are likely to be much lower,” said Mr Peters.
“The average time taken to fill vacancies has extended from 21 to 33 days year on year, reflecting the changing dynamics in the market.”
Despite a tight labour market and general competitiveness, Mr Peters suggested that the market is increasingly becoming an employers’ market. Employees, for their part, want “job security and career opportunities”.
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Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
