The latest edition of the Employment Hero SME Index reveals a continued increase in the wages of employees particularly in the manufacturing, transport, and logistics sectors.
According to the Index’s Pay Components report, which examines the different elements that make up an employee’s take-home pay across more than 8000 SMEs and their collective 700,000 employees, since June 2022, employees in the manufacturing, transport and logistics industry have experienced a surge of 30.2 per cent in their median base rates, accompanied by a 12.5 per cent increase in median penalty rates, and a 12.4 per cent boost in median allowances.
Workers in the bottom 25th percentile salary bracket saw their monthly base rates rise from $5,356 to $6143 from June 2022 to June 2023 respectively (a growth of 14.7 per cent). Median monthly base rates grew from $9958 to $12,969 and for workers in the top 25th percentile, monthly base rates jumped from $31,691 to $38,537 (21.6 per cent) between June 2022 and June 2023.
The report also notes that workers within these industries are also working more monthly hours (up 2.3 per cent since April 2023) while the average SME size in this industry is slightly shrinking (-0.1 per cent month-on-month).
“There is a discernible rise in employees’ median base rates within the manufacturing, transport and logistics industry,” Ben Thompson, Co-founder and CEO of Employment Hero, said. “This upward trajectory is particularly noteworthy, given the improved Purchasing Managers’ Index (PMI), which indicates the manufacturing sector’s resilience in withstanding a potential downturn and exhibiting slight growth.
“The granularity offered by the SME Index has allowed us to identify a potential wage-price spiral within the sector, given the growth in base rates affected employees across all pay bands,” Thompson added. “As within any industry, this interplay between wages and prices warrants thoughtful consideration, as it may have far-reaching implications for the industry’s overall stability and growth. Indeed, the National Minimum wage increases that took effect in July add yet another layer of complexity to the wage landscape.”
The Index also reports that in June 2023, the average number of employees among Australian SMEs was 24.9 points more than in January 2019. Meanwhile, average employee growth has marginally decreased (-0.2 per cent) since May 2023, while in the past year, SMEs experienced employee growth of 6.5 per cent. Median hourly wages increased by 7.4 per cent YoY, with a month-on-month (MoM) increase of 0.9 per cent.
Median hourly rate for employees working in Australian SMEs is now $36.16 AUD, which is $0.29 AUD more than in May 2023 according to the Index. Median monthly hours worked have increased by 5.8 in the last year, with a MoM increase of 8.4 per cent. The median monthly hours worked for employees working in Australian SMEs is now 148.2 hours for June 2023. The median employee base rates increased YoY by 9.2 per cent.
