We’re currently seeing salary increases across the private and public sector. Industries such as hospitality and law have experienced some of the most significant wage growth. Many employees who are aware of the skills shortages and the hot employment market (which favours candidates) are naturally looking to increase their wages. However, we’re also seeing that often salary expectation is out of line with the market and employees are expecting their pay increase to be larger than the reality.
Cost of living
It’s no wonder people are looking to improve their salaries given that inflation is rising alongside wage growth. The real measure of wages is in the buying power of people’s pay. This recent article in SMH looked at recent wage growth compared to the wage price index and the results are bleak. According to their analysis, “because the cost of living has risen at a faster pace than pay packets over the past year or so, real wages have fallen over that period. In terms of buying power, workers are no better off today than they were about four or five years ago.”
We ran the below poll this week to see what pay increase expectations there currently are among our participating audience. The results are reflective of what we’ve been seeing with over a third of voters believing a pay increase of over 15% is likely.
So how does expectation match reality? We took a look at the average salary increase we’ve seen across all the placements we made this year in Accounting, Environment and Law and the results may surprise you:
- Accounting – 4.4% total average increase
- Environment – one candidate achieved a whopping 76% increase (bumping the total average up to 16.26%) but when this candidate is removed, the average was a 6.78% salary increase
- Law – 9.12% total average increase
Cost of doing business
The reality is that the cost of doing business also increases along with inflation. Many companies took a financial hit as a result of COVID-19 that they’re still recovering from.
That being said, within most sectors, now is certainly a good to time to instigate a salary increase, whether it’s by seeking new job opportunities at a different organisation or by asking your boss for a pay rise. However, the reality is that huge pay increases are still quite rare. It’s a good idea to be aware of how you compare to others within your industry in similar positions so that you can manage your salary expectations accordingly. Just how much of a salary increase you achieve will be dependent on your industry, skills and experience.