Good times have a cost

Western Australian small to medium sized business owners fear the state is on the verge of a wages blow-out, with high resources sector salaries raising employee salary expectations beyond their capabilities.

While the state’s buoyant economy has generated a wealth of business opportunities, and pushed the unemployment rate to historically low levels, SMEs continue to experience acute staffing issues they say are affecting their growth plans.

A recent survey conducted by Perth-based accounting firm Thornton Partners found that almost 60 per cent of WA SMEs listed staffing issues as their main concern, with wage expectations driving those concerns.

Thornton Partners director Clive Boyle said the perception among employers was that the high wages achievable in the resources sector was driving employee attitudes towards salaries, leading to a declining sense of job loyalty, commitment and in some cases complacency about work standards.

He believes these attitudes among today’s highly mobile workforce is creating a new ‘why’ generation – as in, ‘why accept less than I could be earning?’ – a departure from previous consider-ations such as job security.

“Western Australia’s economy has been going well for a reasonable amount of time. We’ve seen this trend for at least 12 months, maybe longer,” Mr Boyle said.

He said that, if employers couldn’t match the salaries being offered by the mining companies, then they should look at other ways of attracting and retaining skilled staff.

“The sorts of strategies people need to look at are the environment of the workplace, the type of work, and looking at encouraging people to stay, rather than just looking at wages,” Mr Boyle said. “If you can’t match wages, giving employees greater challenges may relay to greater enjoyment of work.”

Managing director of environmental services company Natural Area Management and Services, David Hancock, said he had been concerned for some time about employees’ future expectations of salary.

He believes that higher salary demands, on the back of rising housing and fuel costs, combined with low unemployment rates, could lead to a possible wages blow-out.

“People are chasing the money, and there are job opportunities there for them,” he said.

Mr Hancock said he had lifted his employee’s wages by 15-18 per cent during the past 14 months to stay competitive in the labour marketplace.

“We’re under pressure from existing employees for higher wages, and were running the risk of having skilled people leave that are costly to replace,” he said.

“We can’t compete with what the [mining companies] are prepared to pay.”

Master Builders Association of WA housing director Gavan Forster said the building and construction sectors had also faced an exodus of employees, with both blue and white collar workers being lured to the north-west by big salary offers.

Mr Forster said he had heard of builders offering annual salaries upwards of $50,000 to receptionists in order to attract skilled employees.

“It is rife. For many companies their workforce is like a revolving door,” he said. “It’s the law of the jungle – people in high demand ask for more, and if they are highly valued then they will be paid more.”

Recruitment firm Drake Australia WA state manager Kate Duncan said while the skills shortage and subsequent wage rises initially hit the trades sector, its has since gone across to all sectors, with office support staff, technical staff, accountants and financial staff now in high demand.