Increasingly, there is a mismatch between what employees want to be paid and what employers are willing to offer.
According to the Hays 2024 Salary Guide, two-thirds of employees want a pay rise of 3% this year. However, the same survey found that employers are only willing to offer an extra 0.3% on average.
This is driving many people to pursue a career change to increase their earning potential.
Thanks to News.com.au, Robert Half and Hays, we explore the factors behind this trend.
What workers are looking for
Most Australian workers consider increasing their wages a top priority in the year ahead. 71% of employees say receiving a pay rise is their most important career objective in the year ahead.
For many, the rising cost of living is a critical factor in their decision to switch jobs and careers. Mounting cost-of-living pressures are compelling more individuals to consider leaving their current jobs for a higher-paying role.
77% of those surveyed are actively seeking a new job in the next twelve months, with 64% citing the cost of living as the primary factor.
Many workers are grappling with the need for substantial wage increases to cope with escalating expenses. To keep pace with the mounting cost of living, a person earning $70,000 a year would require a pay rise of $2,520 a year, while a person earning $100,000 a year would need an additional $3,690 a year.
However, research indicates that advertised salaries are increasing faster than wages. So, for many, changing roles is the best way to get the wage increase they need.
Due partly to the cost-of-living crisis, expectations of salary increases have risen over time. In 2019, two-thirds of employees expected a pay rise of less than 3%. However, 61% of employees now expect a pay rise of more than 3%. This has been accompanied by a significant increase in dissatisfaction with current salary levels.
41% of employees are dissatisfied with their salaries, up from 28% last year. 13% of employers planned no pay rise this year, and 15% of workers were not expecting one.
Many employees believe they should be paid more based on their output.
73% of employees don’t think their salary reflects their performance
An employers perspective
A decrease in skills shortages is limiting the pay increases employers are willing to offer. 47% of businesses now report they are facing little or no skills shortages. As skills shortages have eased, 25% fewer employers plan to provide a salary increase of over 3% this year.
Many employers are aware of the pressures employees are facing but have to balance this with other concerns.
Only 14% of employers plan to offer a wage increase in line with inflation, with 17% saying this would be too risky for the business.
27% said they had to balance helping their employees with the cost of living and maintaining their business’s stability.
Faced with rising expenses themselves, 18% of employers said they could not afford to increase salaries in the next year.
If you are not satisfied with your current salary and are looking for a higher-paying role, now could be the perfect time to consider a career change.
If you are considering a career change, Public Service Resumes is pleased to offer various services to support your transition, including interview skills coaching and career development coaching.