Latest findings from the Australian Institute of Management (AIM) 2016 National Salary Survey released today, show the Australian living standard is now under more pressure than ever before with wage growth falling in line with the rate of inflation, a statistic rarely seen in Australia over the past three decades.
The 2016 survey found the overall salary movement is currently sitting at +3.0 per cent, which is a decrease from the +3.4 per cent reported in 2015 and the lowest reported percentage since 2012, dropping 1.1 per cent overall in four years. This downward trend is forecast to continue in 2017, especially in Queensland and Western Australia, both of which have been affected by the mining downturn.
The salary movement decrease has hit the construction and manufacturing industries the hardest, with economists suggesting the mining boom disguised the national salary decrease. With retail, finance and business industries also under threat from the decrease, AIM’s National Salary Survey has uncovered the reasons employees are unhappy in their current roles, with more than four out of five (81.9 per cent) choosing to leave to look for new challenges, more than half (56.5 per cent) citing limited career advancement opportunities and 44.4% looking for better financial reward.
With less than a week to the 2016 Federal Budget, which is speculated to include a number of changes to superannuation concessions, the survey found one in three (34.5 per cent) Australian businesses are making contributions above the superannuation guarantee (9.5 per cent). However, the proportion of employees who are salary sacrificing has dropped across the board since last year, suggesting Australian employees are putting less focus on their retirement, choosing instead to use their disposable incomes to maintain their current standard of living.
The survey also found 66.8 per cent of Australian employees left a current job to start a similar role at another organisation. Businesses are worried workplace culture is to blame for this shift, with 63.7 per cent citing this as the human resource issue they are most concerned about. David Pich, AIM Chief Executive Officer, notes the cost of staff recruitment is a threat to business operational costs, with the study putting the cost of replacing staff at $26,410, which equates to almost half the average salary in Australia.
“Retaining staff is no easy feat. Employees can become restless in roles that have limited career advancements or where they don’t enjoy their time at work. Combine that with a volatile property and rental market and the pressure to contribute more to their superannuation fund, it’s no wonder staff are becoming disillusioned and feel the need to move jobs as a perceived guarantee to a salary increase. People are investing less into their future, because they need to spend more now,” says Pich.
Pich encourages business leaders to reassess their current pay model and suggests creating a positive and inspiring workplace culture to decrease staff turnover and retain human resource.
“People don’t leave companies; they leave leaders. Great managers and leaders make decisions that impact people’s lives and that impact can be felt well beyond the workplace. We spend about a third of our working-age lives doing just that – working. So it is vital our experiences in the workplace are positive as they impact on our overall well-being and on society as a whole. At AIM, we’re constantly encouraging our Members to invest in building a positive workplace culture, by having open streams of conversation and offering training and professional development support.”
The AIM National Salary Survey, now in its 52nd year, is based on the responses of more than 500 organisations across Australia, covering more than 25,000 employees and 270 job roles. Full results for the 2016 study will be released on Thursday 5th of May and can be purchased athttp://pages.aim.com.au/nss.