WA employees win big in wage stakes

Employees in large Western Australian companies received the biggest wage hike in the country with a 4.6 per cent increase over the past 12 months, higher than the 3.7 per cent national average, new figures show.

And the outlook is even better, with the companies forecasting average wage increases of 4.4 per cent for 2010-11, 0.8 per cent higher than the national average, the Australian Institute of Management's national salary survey 2010 said today.

The survey found that 73.6 per cent of companies paid salary increases in the 2009-10 year, which was significantly lower than the 96 per cent that did so in the previous 12 month period. And the average increase for those that did was 3.7 per cent - a figure lower than the average pay rise of 4.3 per cent awarded in the previous year.

Almost double the number of large companies reported a decrease in permanent staff levels in the past 12 months - 40.5 per cent - compared to 22.7 per cent in the 2009 survey.

Not surprisingly, involuntary staff turnover rates increased from 4.8 per cent in 2009 to 5.2 per cent in the 2010 survey, due largely to an increase in redundancy programs initiated during the economic crisis.

Looking ahead however, the survey points to a more positive turnaround in staff employment and earnings prospects. At least 90 per cent of large companies expect to review salaries, for at least some employees, over the next 12 months. In addition, around half (49.4 per cent) expect permanent staff numbers to increase, while only 12.5 per cent expect a decrease in permanent staff levels (down significantly from the 23.5 per cent forecast decrease expected in the previous year's survey).

"As the job market continues to improve the big challenge is going to be finding ways to keep good people without incurring huge wage cost blowouts," AIM WA's deputy executive director Shaun Ridley saod.

"For the past two years, it has really been an employer's market but that is all about to change. Staff who may have tightened their belts in leaner times will again be on the hunt for new opportunities and bigger pay packets. Many employers will still have big cost pressures but the savvier ones will look at creative ways to motivate people, without offering big salary hikes".

Despite rising unemployment in the past year, 36.9 per cent of large companies still reported difficulty recruiting some staff due to skill shortages. These recruiting difficulties were most commonly found in the Professional/Technical job level and within the Construction/Engineering, Sales & Marketing, Finance/Accounting and Technical/Trade job functions.

"And with the skills shortage tipped to worsen, employers need to move sooner rather than later to lock in their best and brightest in those sectors most susceptible to skills shortages," Dr Ridley said.

"Although pay will always remain an important factor, key to success in these sectors and indeed in all sectors will be the development and active implementation of training, career development and succession plans at all levels across the organisation for both retention and attraction purposes and to ensure the organisation reaps the benefits from a training investment."

When it comes to dedicated training budgets and succession planning, large companies appear to be getting the message, with a notable increase in the proportion of large companies reporting to have both a dedicated training budget and formal succession plans in place, when compared to the 2008 and 2009 editions of the survey.

There has been a notable increase also in the number of large companies offering totally flexible salary packaging and an increase in the proportion of those offering some form of variable reward to employees (across job levels). As was the case in the 2008 and 2009 surveys, fewer employees in large companies are making additional superannuation payments above the SGC.

The survey is based on the responses of 750 companies, comprising 546 large companies and 204 small companies throughout Australia.