Figures released from EST10’s 2022 salary guide show average increases for permanent administration positions up 13.5 per cent and 15 per cent for temporary roles. But it’s not just administration staff; salary increases are across the board. More than 93 per cent of Australian organisations are planning salary increases for their workforce in 2022 of 3 per cent, but will that be enough?
Understanding the drivers
Two issues are occurring concurrently, inflation and fierce competition. Existential costs are hard to ignore. The Consumer Price Index (CPI) rose 3.5 per cent over 12 months to the December 2021 quarter, and November 2021 reflected a seven-year high.
The supply and demand equation demonstrates clearly just how competitive our talent market is. Record high job vacancies and too few job applicants. Escalation, and like any bidding war, the price goes up. It’s a global issue too. In the U.S, job vacancies have outnumbered job applicants since 2018.
What has caused the talent shortage? The ageing population exiting the workforce and reduced birth rates conspired simultaneously with the collective paradigm of changing beliefs. The pandemic acted as the co-conspirator and influencer. Anthony Klotz’s “Great Resignation” talks of the shifting expectation from our workforce on where, how, and why we work.
Smart leaders and managers are tuning into their employees, delivering on areas not just salary-related.
What can you do?
Understand your workforce’s top priorities. Whilst salary is paramount, post-pandemic and our workforce is seeking more purpose-led work and values-based actions from companies. Have regular conversations with your team, listen, be alert and in touch with their reality. Where applicable, apply changes, even if incremental, to your work environment. Businesses that grasp workforce needs well go a long way in satisfying their employees and, attract new talent.
Look to provide benefits beyond salary. Additional superannuation contributions, health care, extra annual leave, travel allowance, educational rebates etc. The hybrid model is highly sought after for flexibility. However, it also puts money in your employee’s pocket via reduced costs of wardrobe, food, travel, and tax incentives.
Be radar aware of headhunts to your team. It’s one thing not to be looking for a job, but what if it’s dangled right under your nose? What was reserved for executives and high-end professionals is now occurring across every position and industry. Your employees may be loyal and happy, but a headhunt, especially if not used to receiving them, can be hard to resist. It’s flattering and bestows acknowledgement.
Assess value created. You might baulk at the increase for your customer service representative, as 15 per cent seems exorbitant in anyone’s language. But, if their customer retention rate is excellent, complaint escalations resolved and leads generated, why quibble over a relatively minimal increase compared to the value created.
Seeking the perfect candidate in today’s market is a delusion, yet we try. Consider viewing talent differently and look to someone’s potential instead of the finished product. What skills can be learnt and trained on? In ensuring the success of your new hires, provide a nurturing and supportive environment with patience and encouragement.
It’s not over
Our workforce is enticed by advancements, promotions, and salaries. The grass isn’t always greener though, and the abundance of opportunities won’t necessarily guarantee happiness or success. Be flexible with your exiting employees, keep the door wide and open, and make it easy for them to return.
Employees are our very precious human capital and are in scarce supply. Satisfying our workforce’s intrinsic wants and desires is necessary, but so too is the need to pay basic household expenses. With climbing costs of living and global socio-economic disruptions, our workforce looks to their earning potential, anxiety-laden. No business can afford to ignore the current reality.