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So, did you get a pay rise or what?

Kate Southam

Thursday, August 05, 2010 at 08:12am
 

So now we are into August I have a question for you: Did you get a pay rise in July?

Some companies pay on an employee’s anniversary but most employers run to a financial year making July the time pay rises hit the bank account. Did anything hit yours?

The news from recruiters is that salary increases remain modest but that for those willing to jump jobs, salaries are moving up faster. True?

Before I go into the figures here, spare a thought for US workers. According to a story in the New York Times, US employers have moved from forcing people to take time off without pay to simply cutting wages.

At GM new workers are being hired on half the hourly rate of existing workers, Newsday staff agreed to a 5% pay cut, paper mill workers in Maine an 8.5% cut, University of Hawaii professors 6.7%, State Troopers in Vermont 3% and the list goes on. A fridge maker in Wisconsin has told workers to take a 20% pay cut or it will close its factory.

In Australia, while salary growth is modest here at least it’s on the rise. 

New figures out today from large recruiter IPA claim job vacancies rose by 13% last month and that the number of good candidates for every one available job is in decline giving job hunters more power in salary/wage negotiations.

Despite this shift, IPA describes pressure on wages as “relatively benign”. IPA exec Darrell Hewton says: “"Whilst bargaining power has shifted to candidates, generally candidates are seeking modest wage rises.  However, there are hot spots such as mining and specialist IT where wage inflation is strong.”

The Clarius Skills Index for the June quarter reveals a growing skill shortage in 8 of the 20 occupations it measures with a further two occupations on the cusp of a shortfall.

Prepared by KPMG Econtech, the index shows skilled building & engineering professionals, “computing” professionals (ICT), chefs, metal trades professionals and automotive, construction and wood trades people are all in demand. Clarius predicts skilled labour shortages will drive up annual earnings by 5.4 per cent over the next three years and that unemployment will drop below 5% by early 2011. Clarius reckons there is currently a shortage of 6,300 construction workers.

One ICT business analyst told me had noticed a spike in rates for his role after returning from an extended break. He reckons day rates of $650 to $750 are being paid to business analysts with up to 7 years experience and $550 to $650 a day for technical analysts. Sound like you?

The recently released Michael Page Salary and Employment Forecast surveyed 800 senior managers and found 40 per cent were planning to reward staff with pay rises in the next six months.

Of those, about two thirds expect to award increases of only 2-5% mostly in “back office” roles such as HR, accounting, marketing and ICT.

I called up Michael Page to ask them what was happening for those moving jobs. Consultants in the field reckon that “talent” moving jobs can command higher salaries of between 5-10%. Anyone out there testing the market?

Regional managing director of Michael Page Australia and New Zealand Phillip Guest says while economic conditions have improved many employers are still cautious.

He says employers know they may lose people if they don’t pay higher salaries but that economic conditions are not strong enough yet to “absorb escalating payroll costs”.

That doesn’t mean we don’t expect more money. Alliance recruitment has seen a serious spike in the salary expectations of those working in the insurance broking and financial planning with some candidates wanting a 30% increase to change jobs right now.

Paul Barbaro, executive general manager of Alliance Recruitment says some “blue-ribbon firms” might be able to pay that but that medium to low-tier firms are not.

So tell us your negotiating tales? Have you landed a better deal? 



..

Have Your Say

Show Oldest | Newest first    Page 1 of 2      1 2 >

Another interesting blog Kate.  I can’t comment personally on pay rises as I have been self employed for over a decade but those statistics from the US are shocking!  Good luck to GM with incoming staff pay at 50% of other workers in the organization.  I can say of my friends employed here in Australia their salaries either stay the same or they receive pay raises.  At least they’re not going backwards!

stella by the sea of sydney (Reply)
Thu 05 Aug 10 (09:15am)

I moved companies and received more pay for the same level job. Three other companies also offered positions at above 10 percent increase.  My old company counter-offered but they weren’t willing to go up to 10 percent, however I imagine they would have paid much more to advertise, hire and train a replacement. Companies need to implement more creative ideas to keep staff, because it’s too appealing for staff to move if they’re not being rewarded.

dealbreaker of Sydney (Reply)
Thu 05 Aug 10 (09:22am)

Good on you Dealbreaker. Hope you enjoy the new job.Would you care to share what kind of role or what industry to help out others who might be contemplating a move? Thanks. 

Kate Southam
Thu 05 Aug 10 (09:25am)

“Payrise in July” Who do I speak to about that?I work in an industry (auto) where margins are continually getting squeezed so payrises are very hard to come by. I did negotiate a deal where I get a bonus for additional profit created but I had to listen to a lecture and work for it.

Sarak5 of Brookvale (Reply)
Thu 05 Aug 10 (11:30am)

Yes, 6% actually, can’t complain. Salary was pretty tasty beforehand too.

Womble of Melbourne (Reply)
Thu 05 Aug 10 (01:22pm)

Congrats!

Kate Southam
Thu 05 Aug 10 (01:46pm)

I would be surprised if many people outside of Council on the Gold Coast have received a pay rise in the past 2 years.

After all, the Gold Coast unemployment level is rumoured to be above 10%.

I work for a company closely related to the development industry, and no one has received a pay rise in the past 2 years.

Much of this has to do with dwindling income due to bankrupt developers.

Tom of Gold Coast (Reply)
Thu 05 Aug 10 (02:11pm)

This year i received an 11% increase. I have worked for my current company for 6 years now and each year except last year i have received a 3 - 10% increase. I think starting somewhere as a jr and working your way up helps. grin

Lucky of Melb (Reply)
Thu 05 Aug 10 (02:36pm)
lucky replied to Lucky
Thu 05 Aug 10 (02:57pm)

I have an Admin/PA/Allrounder roll for Eng Company

Eee gads, that’s a lot. No one is telling us the industry or role they are in. Care to share Lucky? What do you do or what industry are you in?

Kate Southam
Thu 05 Aug 10 (02:38pm)

dealbreaker, 10% is a lot (depending on your role),the problem from the employer side (and I’ve seen this happen a number of times)is that even if they agree to the full rise, whats to stop the employee pulling the same stunt in 6 months time? And telling all their colleagues how smart they are at playing the system?

Agreeing creates a bigger headache for the company in the long run, better to pay a couple of thousand to advertise and train, than give an out of banding payrise and then have to hire and train again in a few months anyway.

You already had a foot out the door, why would your employer make the effort to keep you at that stage?

On the otherhand if your employer doesn’t give oportunities for regular cpi or performace based payrises (say once per year) then they are probably getting what they deserve.

sousy (Reply)
Thu 05 Aug 10 (03:02pm)
Em replied to sousy
Thu 05 Aug 10 (04:20pm)

And telling all their colleagues how smart they are at playing the system?

Most places I’ve worked have had a clause in the employment contract that any discussion of salaries is cause for instant dismissal.  You won’t find too many talking about their pay.

Agreeing creates a bigger headache for the company in the long run, better to pay a couple of thousand to advertise and train, than give an out of banding payrise and then have to hire and train again in a few months anyway.

Which means they are still underpaying the poor sap who walks in to take over. If the pay for the same job is offered at a significantly higher rate, then the original employer is NOT paying enough. ‘Nuff said.  I know I was well and truly underpaid in my previous job. Walked into a new one an an instant 25% pay increase.

You already had a foot out the door, why would your employer make the effort to keep you at that stage?

Perhaps they realised that they were going to lose a valuable employee through their own foolishness?

AK replied to sousy
Fri 06 Aug 10 (12:16pm)

@Em

A clause to prevent people talking about their salary.  A great way for “The Man” to keep their people underpaid.

I wonder how they would go if everyone talked about their salary, can’t fire everyone.

Personally I have no issue discussing my pay with colleagues who reciprocate, its a way to find out how valuable you are to the company.

Nope. Nothing.

So, lets do a fun exercise shall we ? Lets note a few rises that I’ve suffered under given the last few months - most from QLD state and local government mismanagement.

Car rego...up $50 per 6 months. Vehicles x 2.
Council rates...up $100 per 6 months.
Public transport...up $100 per month.
Home loan...up around $200 per month.
Electricity...up $100 per quarter.
Body Corporate...up $100 per quarter.
Water...expecting $200 per quarter.
Petrol...up 20c per litre. About $50 per month.
Food...up around $50 per month.
Insurances...up around $75 per month.

That’s what I can think of off the top of my head…

For anyone bothering to keep a tally, that’s $5,300 per annum in net salary, equating to almost $10,000 gross that I need to receive as a pay rise from my employer just to break even.

Fellow bloggers, don’t bother coming to QLD...it’s the state of mismanagement. I thought NSW was bad. This place takes the cake.

Kate, you may wish to follow up with an article as to what entitles the government to jack up everything because of their own financial mismanagement, knowing full well a large portion of the population have received little or no pay rises.

I’m no maths expert, but I am certain all these rises are greater than CPI...so why are many employees restricted to CPI rises in their pay ?

Blackadder of Gold Coast (Reply)
Thu 05 Aug 10 (03:18pm)

Automatic 4% for me.  Not a bad rise considering I got a promotion a couple months before that with another significant payrise. Guess I’m in an industry that supports it.

Mind you, this is the last year of our current EBA, so it’ll probably drop as of next year, if we get anything at all. I remember when I first started this job it was a 1% increase (laughable).

Em of Melbourne (Reply)
Thu 05 Aug 10 (04:15pm)

Yes, just got a 4.5% increase, plus a bonus.  Working as a PA also.  I’m very lucky that I work for a great company who look after their staff.

Louise of Melb (Reply)
Thu 05 Aug 10 (05:04pm)

I haven’t been bothered to work out a percentage but my net pay went up $10 a week. I didn’t even notice it. After seeing this blog I checked my payslip and found out. I guess it’s not much to write home about.

RuthM of NT (Reply)
Thu 05 Aug 10 (05:21pm)
cubemonkey replied to RuthM
Fri 06 Aug 10 (12:11pm)

I’m in a similiar position Ruth.

Still, 20 dollars a fortnight can be two lunches that you don’t bring from home, or a monthly delivered pizza with garlic bread and a coke.

It’s not a lot, but you’ve got to love the little things.

RuthM replied to RuthM
Fri 06 Aug 10 (03:07pm)

True, it’s $40 a month that I didn’t have beforehand. I’d rather it in my pocket than not have it at all smile

Eltial replied to RuthM
Fri 06 Aug 10 (04:44pm)

sure the 10 bucks wasnt your tax cut?

No pay rise for me :(

I wasn’t expecting one, as we are currently in the midst of a large project, and horribly behind. The company doesn’t get paid until certain milestones are reached, and when we are finally finished the quota for this project I will be putting my hand out. 14 - 18 hour days just to try to catch up are killing me.

The problem will become knowing my salary increase will be at the expense of a casual employee.

Boneheadz of Brisbane (Reply)
Thu 05 Aug 10 (09:05pm)

I got 15% payrise in July working as accountant. However I did not get receive bonus or payment for the many hours of overtime I did.  My payrise also compensate for missing out on non-cash benefits. I was made aware that my workload in the new financial year will be a lot more complex and demanding. So I guess the payrise really is not that generous compares to others.

daien (Reply)
Fri 06 Aug 10 (09:05am)

I received 12.5% at my July review, although I’ve had to work pretty hard to get it. I was told I was expected to fail in the position, so when I didn’t, they were happy to reward me. I work in purchasing - promoted from admin assistant after an unexpected resignation. No purchasing experience so had to jump in with both feet and quickly learn to swim. So far, so good!

buying power of qld (Reply)
Fri 06 Aug 10 (09:34am)

I got one but it came with a promotion so I am not sure it really counts. Through in the fact that I was at the top of one pay bracket and have moved to the bottom of the next and my pay rise is a whole $500pa more than I was earning but its better than nothing.

Jane (Reply)
Fri 06 Aug 10 (09:42am)

Most people in Australia should expect in time the American experience to be replicated here.

If another nation pays only 20% of what a worker here earns it is inevitable that a global equilibrium will be eventually reached in regards to wages and conditions, for many but not all jobs.

Importing goods on a massive scale and removing your own countries productive capacity can lead to nothing good in the longer term.

We have only just started to see the results of the decades of neglect that we have inflicted on our manufacturing and service industries.

How crazy to send our jobs offshore and then still expect to be able to pay people well for their labour. We are essentially destroying our own economy and long term futures for the sake of a fast buck.

I pity the young and the future they will enjoy in this once great country. Maybe they can start learning Cantonese and Mandarin now and when their new masters need help running the country they have bought using our own debt to do so they can assist them.

Ryder (Reply)
Fri 06 Aug 10 (10:23am)

I’m in the commercial construction industry… Haven’t had a payrise in three years. Business has been pretty tough…

Interested to know if there are any commercial construction companies actually increasing salaries at the moment..?

jaga of Sydney (Reply)
Fri 06 Aug 10 (10:36am)

a useless 2% or about $34 a month, feel like i’m stuck between a rock and a hard place, got this Job as a grad using outdated technology been here for three years getting paid 50K no other jobs out there, so what do i do? take a 10K paycut and get another grad job or what?

Chris of Brisbane (Reply)
Fri 06 Aug 10 (10:53am)
JW replied to Chris
Fri 06 Aug 10 (01:54pm)

Chris

Maybe you only got 2% because somehow you think that 2% of $50k is $34 a month.

Got 15%, very happy. Engineering / Construction for mining company - reviews are done in March, but rises start in July backdated to March.

Lucky of Perth (Reply)
Fri 06 Aug 10 (11:31am)

Nothing yet, won’t find out till September. Last year it was 3% the year before 6%. This year I am hoping for about 5%, maybe?

We also get performance related bonuses, last year it was about $6k pre tax, the year before $11k pre tax. So this year I am guessing around 8k before tax?

I think somewhere in between the last two years due to the GFC.

I work for a large mining company, in a regional area.

KikiNZ of W.A (Reply)
Fri 06 Aug 10 (12:07pm)

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Kate Southam

Kate Southam

Career queen Kate Southam gets to grips with all the emotional highs and lows, legal puzzles and human drama of the workplace. No elephants in the room will be ignored.

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