Recruiter expects big salary lift

Western Australian businesses plan to lift their salary budgets by 24 per cent to compete for talent and respond to inflation, according to a survey by professional services recruiter Robert Half.

That’s above the average forecast national rise of 20 per cent, the recruitment company said.

Robert Half recruits in technology, risk and compliance, business support and finance.

Perth has had the highest inflation of capital cities in Australia, running at 7.4 per cent in the year to June, compared to 6.1 per cent across the country.

WA has also had low unemployment, at 3.4 per cent in June.

That strong jobs market will also impact salary bills, with businesses fighting for talent.

Large businesses would have the biggest increases in salary budgets nationally, at 29 per cent, Robert Half predicted.

“Businesses competing to fill vacant positions or grow their headcount are willing to offer salary increases of 15 per cent or more to secure talent, so employers that do not lift their salary budgets or extend raises to their existing employees are likely to see an exodus of talent,” Robert Half Asia Pacific senior managing director David Jones told Business News.

“This has given rise to an ‘elevator effect’ with salary budgets increasing overall, as businesses race to meet the rising salary expectations of new and existing workers whilst addressing inflation concerns in turn.”

Workers that had not received a pay rise effectively had a lower income than 12 months ago, he said.

“In today’s hyper-competitive tight labour market, savvy workers are aware that they are in the driver’s seat and do not need to rely on their existing employer to offer a raise for them to achieve a salary jump that outpaces the rising cost of living,” Mr Jones said.

The state's wage price index rose 2.7 per cent in the year to June, but that only tells part of the story.

The Reserve Bank of Australia has said it expects the wage price index to rise at its fastest level in more than a decade in 2024, which it forecast as 3.75 per cent.

That was in minutes from its August meeting released yesterday.

However, the RBA also said broader measures of labour costs would lift faster than the WPI, with bonuses, increased overtime rates and individual workers achieving higher pay by switching jobs, all having an impact.

More than 60 per cent of firms expected to raise wages more than 3 per cent in the year ahead, the RBA said.

“Recent high inflation outcomes were a factor in current wage negotiations, but to date most firms expected to raise wages by less than inflation," the RBA said in the minutes. 

“Multi-year enterprise bargaining agreements, which are common in the public sector and also used by some private sector firms, were expected to restrain the pace of the pick-up in wages growth in Australia. 

“That said, a number of state governments had offered lump-sum payments to some of their public sector employees, in part to offset higher living costs.”

Robert Half said 84 per cent of businesses expected employees to ask for a pay rise.

About 63 per cent of businesses would only give pay rises to workers who ask for one, while a third would give rises to workers without them asking.

It would pay to be more vocal as a worker, the recruitment company said.