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Australia salary trends 2024 – will the 2023 trends continue?
Sreejith Iyer
In 2023, Australian salary budgets surged beyond projections due to higher-than-expected employee turnover and high inflation. According to Mercer’s recently released ‘Australian Salary Outlook 2024’, employers who had planned a median base salary increase of 3 percent ahead of 2023 ended up with increases of 4 percent for the year.
According to Mercer, employee turnover rate in 2022 was the highest in 5 years at 21.4%. The average total turnover in the first half of 2023 was already at 12.3%.
The WPI for the September quarter saw the highest annual growth since March quarter 2009:
Wage Price Index (WPI) rose 1.3 percent in the September quarter 2023 (highest quarterly growth in the 26-year history of the WPI), and 4.0 percent for the year, according to seasonally adjusted data released by the Australian Bureau of Statistics (ABS).
Wage movement in the Private sector:
The report further stated that almost half of all jobs (49 percent) in the private sector recorded a wage movement, with the average hourly wage increase being 5.8 percent compared to 4.3 percent in September quarter, 2022. The main drivers were:
Jobs paid by individual arrangement that received structured annual salary reviews.
Scheduled increases from enterprise agreements.
Award-reliant jobs linked to the Fair Work Commission Annual Wage Review or Aged Care Work Value case decisions.
Labour market pressure.
Inflation rises.
In last year’s Mercer survey, 22 percent of employers said they planned to increase salaries in line with or above inflation for 2023. In reality it was 27 percent, and in 2024 25 percent expect to do the same.
What’s in store for 2024 for Australia:
The salary increase forecast will be maintained in 2024.
Mercer Australian salary outlook 2024 forecasts Australia median merit salary increase of 3.5 percent.
Hiring plans to remain cautious.
With economic uncertainty looming and reports of global economic growth slowing in 2024, hiring plans for the next year are projected to remain cautious.
Australia’s unemployment rate expected to rise 4.5 percent by the end of 2024.
Australia’s unemployment rate, sitting at 3.7 percent at the end of 2023, is expected to rise to 4.5 percent by the end of 2024.
The surge in job mobility that we saw in 2022 and 2023 might be finally easing.
The scarcity of job opportunities and ongoing cost of living pressures will all lead to employees being more inclined to stay put in their roles and focus on career progression.
Inflation is expected to decrease to 3.5 percent by mid-2024.
By the end of 2024, inflation is projected to be 3.25 percent, and expected to decrease further to 3 percent by mid 2025, and 2.75 percent by the end of 2025. According to Mercer, 26 percent of the employers they surveyed do not plan to consider inflation into their 2024 salary increase budgets. This figure was at 14 percent in last year’s survey.
Hiring and retention challenges in 2024:
Hiring and retention will continue to remain a primary concern in 2024. A Mercer study states that 60 percent of organisations say they have difficulty hiring or retaining employees in certain roles. Australian respondents to Mercer’s ‘Total Remuneration Survey’, said roles in sales, marketing, and product management; engineering and science; IT, telecom and internet; and production and skilled trades were the most difficult to fill and retain.
LinkedIn, in its recent ‘Talent Trends Report’ says that compared to a year ago, most respondents to its 12-country Workforce Confidence Index have shown they are less confident in their prospective career progress. As seen in the graph below, Australia is lagging considerably in this aspect.
The 2023 Skills Priority List Report from Jobs and Skills Australia shows that 36 percent of occupations were in national shortage in the country. And skills shortages among professional group occupations remained severe (48 percent in this category were in shortage).
Median merit salary increases in other APAC regions for 2024:
Salary budget trends within different industries for 2024:
The Mercer Australian Salary Outlook for 2024 anticipates robust salary budget increases across various industries, with most sectors, excluding non-financial services, non-manufacturing, and transportation equipment, projecting a growth of over 3.5 percent. Particularly noteworthy is the manufacturing, chemicals, and energy sectors, which are set for an even more substantial increase, expecting a 4 percent surge in salary budgets for the upcoming year.
What do companies need to consider for 2024?
Come 2024, companies need to focus on the following to remain competitive in the current labour market:
Having a robust retention policy in place.
Review total remuneration strategy to ensure it is both sustainable and competitive, allowing for modest increases, employee benefits, learning and development programs and other retention strategies.
The salary budget forecasts remain high for 2024. However, with economic growth slowing down potentially leading to a more cautious approach in hiring, coupled with a higher unemployment rate and a lower employee turnover, pressure on salary adjustments for 2024 may ease.
Sreejith is our Senior Researcher within our APAC Intelligence Hub and Marketing team. With a strong background in data analysis and research, his core responsibilities include the analysis and production of labor market research reports, as well as regular talent trend insights and articles that inform our global teams and specialists in shaping the exceptional.
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Earlier this year, we proudly took to our LinkedIn channel to share the outstanding achievement of our very own Ironwoman, Rev, who conquered the Port Macquarie Ironman competition. Little did we know, this was only just the start of a journey that would lead her to the iconic Ironwoman competition in Kona, Hawaii.
The Ironman World Championship, held in Kailua-Kona since 1981, stands as the ultimate challenge for athletes across the globe. It’s not just a race; it’s an ultimate test of strength, resilience, and endurance. Making it to Kona alone is a significant accomplishment, and Rev’s journey became a source of inspiration for all who followed her progress here at Hudson RPO and beyond.
The Hudson RPO community rallied behind Rev, who is our Senior Resourcing Specialist when not competing in triathlons. Prior to her Kona triumph, our onsite Macquarie Sydney team organized a baking fundraiser, showcasing the culinary talents of Jess, Ian, Carla, Melissa, Badrul, Amy, and Mandy. The unwavering support and rallying spirit of Rev’s team, whether in the professional realm or her personal endeavours, exemplify the unique and cherished team culture we foster at Hudson RPO.
“I’m very grateful to this incredible team, who I consider my extended family, for always supporting and guiding me.”
On the race day in Kona, Rev showcased her prowess with astounding statistics, completing a 3.8 km swim in 1.25 hours, 180 km by bike in 7.17 hours, and a 42 km run in 6.21 hours. Rev’s journey from Port Macquarie to Kona is not just a personal triumph; it’s a testament to her dedication, commitment, and the way our teams support each other in the pursuit of excellence. Both in and outside of the workplace.
The Hudson RPO Content Team is made up of experts within the Talent Acquisition industry across the Americas, EMEA and APAC regions. They provide educational and critical business insights in the form of research reports, articles, news, videos, podcasts, and more. The team ensures high-quality content that helps all readers make talent decisions with confidence.
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At Hudson RPO, we’re about shaping exceptional outcomes. Every day, our people connect organizations and individuals to create opportunities and bring people and businesses closer to their ambitions. But as a team of passionate individuals, our people also shape the exceptional outside of the workplace. At the end of 2023, we wanted to take the opportunity to shine a spotlight on some of our employees giving back to their communities.
CV Workshop
Bobby, our Lead Recruitment Advisor in the EMEA region, took the initiative to organize a CV Workshop at his local Gurdwara (Sikh Temple). The workshop encompassed CV writing and feedback, career coaching, and open drop-in sessions, all offered at no cost.
Heart Walk
Kevin, Lindsey, Joanna and Michael from the Tampa Centre of Excellence participated in the American Heart Foundation’s Heart Walk. The Heart Walk is designed to raise awareness and funds for heart disease and stroke while promoting physical activity and heart-healthy living!
Keeping the Pinellas Beautiful
Another group from the Tampa Centre of Excellence, Bryan, Gary, Rachel and Emma attended a beach cleanup to help preserve the Pinellas and protect Tampa-Bay marine wildlife.
“A few of us from the Tampa team rolled up our sleeves for a beach cleanup with Keep Pinellas Beautiful! Living in Florida isn't just about soaking up the sun; it's also about preserving those breathtaking beaches we all adore. Big shoutout to these awesome folks for teaming up and making a difference!”
Our partnership with BeOnHand
To make it easier for our people to volunteer for causes they care about, we’ve teamed up with the BeOnHand app that helps them find local, micro volunteering opportunities (including remote opportunities!). Our teams in the EMEA region and APAC regions currently have access to the app. Combined in 2023, the teams volunteered for a total of 368 hours, and planted a total of 5696 trees!
Bree from the APAC leadership team volunteered at an event at her children’s school for ‘icy pole duty’.
Dan (and Winston!) took three pledges in the BeOnhand app to 'Choose to Refuse' on single use plastics.
Sarah signed up for the pledge to avoid buying new clothing for 2 months and purchase second hand items instead.
Christmas Jumper Day
On a festive note to close out the year, the EMEA team recently gathered for their annual Christmas Jumper Day. It’s become a tradition over the years, with some iconic sweaters making recurring appearances (like George’s famous Tesco sweater).
As the office tradition grows, we’ve even seen top-to-toe reindeer suits making their festive debut. It’s a testament to the spirit of our team. Check out the joyful festivities in this video from last year.
Community events
Emma in our APAC region spent her Sunday morning volunteering at a monthly clothes swap to minimize clothing waste, the event also featured a produce swap and a repair café. Meanwhile, Kavya gave back to her community by volunteering in the Kinder program, accompanying kids on a sponsored excursion to Werribee Zoo in Melbourne.
As we take a moment to contemplate the remarkable achievements of our Hudson RPO teams over the past year, our thanks go out to all employees that have shared their stories with us. These extraordinary stories are what makes the Hudson RPO team and culture so exceptional. As we recharge for 2024, we look forward to shining a spotlight on even more of our inspiring employees and their remarkable journeys.
The Hudson RPO Content Team is made up of experts within the Talent Acquisition industry across the Americas, EMEA and APAC regions. They provide educational and critical business insights in the form of research reports, articles, news, videos, podcasts, and more. The team ensures high-quality content that helps all readers make talent decisions with confidence.
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Hudson RPO wins RPO of the year at 2023 SEEK Sara Awards
Content Team
Hudson RPO has been crowned RPO of the Year 2023 at the annual 2023 SEEK Sara Awards. The Australian-based SEEK Annual Recruitment Awards (SARAs) celebrate the people and recruitment businesses striving for excellence in the industry.
A panel of expert judges evaluated nominees on several criteria to select the RPO of the year, including how they:
support and promote their client’s brand in-market,
apply innovation and efficiency to solutions,
execute business partnership,
drive candidate engagement.
Kimberley Hubble, CEO of Hudson RPO Asia Pacific, attended the event in the Sydney Townhall to personally accept the award:
“Being recognised as the best RPO in Australia for 2023 underscores the exceptional commitment and professionalism of our teams who partner with their clients to shape the future of talent. This recognition is extended to each and every employee who make this team so exceptional, positively impacting businesses and careers every single day.”
This award tops off a phenomenal year for the Hudson RPO APAC team, after recently having been named the #1 RPO in APAC on the HRO Today Baker’s Dozen list, and winning the HR Excellence China (HREC) Recruiting & Staffing Solution Provider Value Award.
The Hudson RPO Content Team is made up of experts within the Talent Acquisition industry across the Americas, EMEA and APAC regions. They provide educational and critical business insights in the form of research reports, articles, news, videos, podcasts, and more. The team ensures high-quality content that helps all readers make talent decisions with confidence.
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