Recruitment firm Hays has released their 2021 Salary Guide and we are in a much better economic position than we expected to be at this time last year, but a looming skills shortage threatens to derail general business growth.
The report, which surveyed more than 3,800 individuals and 3,500 organisations found that more than 75% of employers are at or above pre-COVID staffing levels.
"The economic recovery came about faster than anyone expected," said recruitment firm Hays managing director for Australia and New Zealand, Nick Deligiannis. "50% of employers indicate they’re planning to add permanent headcount in the year ahead. We’ve already seen job ads up more than 30% this year."
While confidence is high, employers are worried about finding qualified people to fill vacancies in the coming months.
"There is a supply-and-demand imbalance," said Deloitte Access Economics partner Kristian Kolding. He leads the organisation’s macroeconomic and forecasting policy team in Sydney. "Our unemployment rate means that 750,000 people are looking for work but it’s about finding the right people with the right skills at the right time."
There are many reasons for the shortage – termed a "war for talent" – but it ultimately comes down to limited supply due to the closure of international borders and a reluctance of people to make a change following the volatility of the COVID recession.
International Convention Centre Sydney (ICC Sydney) HR director Natalie Britt says the challenge in finding the right talent is twofold: there must be people available and they need to have transferable skills. "Employers need to acknowledge the changing market," she said. "It’s significantly different than it was six or 12 months ago."
Should you expect a pay rise (and how to get more)
The big question on everyone’s mind was what kind of pay rise to expect this year.
The answer was, unsurprisingly, complicated. 67% of employers said they expect to give a pay rise this year of 3% of less, which matches RBA wage growth predictions. But 67% employees said that 3% isn’t enough to reflect the additional value they have provided to organisations during the pandemic recession.
"Two things stand out to me," said Deloitte’s Kolding. "The skill shortages and how prominently that will effect operations in the year to come. The other thing is the gap – a chasm – between employer expectations and employee expectations for wage rises." Kolding said that employers have created remuneration plans based on historical data and aren’t considering current trends and high cost of living increases caused by the pandemic.
Hays’ Deligiannis said, "The heightened level of salary expectations is notable. It’s good to see that employers are paying a pay rise at all but people are more aware of their value."
That attention comes from people who either put their career progression on hold during the pandemic recession and are now looking to make a move – or make up for lost time – and people who put in the hard yards over the last year and took on extra work.
"Demand is pent-up," said Deligiannis. "Talent is looking to walk out the door and employers are countering with huge increases in salaries to keep talent. I would expect higher pressure on salaries."
If you are looking to get a bigger pay rise, ICC Sydney’s Britt said that it needs to be collaborative between you and your employer. "It’s about having conversations well in advance. It’s also about giving opportunities for non-financial benefits." This includes providing opportunities for up-skilling in in-demand areas like cloud-based technology.
"The time is now to ask for a salary increase," said Kolding. "One of the big factors shaping the labour market is closed international borders. The skills aren’t there right now, putting more power in the hands of employees."
How to position yourself for a new job
The idea of a 'war for talent' aligns with recently released data from jobs board SEEK. They reported their highest-ever number of jobs postings in April while per-job applications had dropped to their lowest level since 2012 with many roles averaging just five applications.
ICC Sydney’s Britt said that, if you’re out of work, you need to prioritise your soft skills and look at ways you can transfer experience across industries. "You need to be open to becoming a generalist and not a specialist."
Britt pointed to recent hires from the airline industry at ICC Sydney whose experience in customer service and hospitality have been a great value-add to the organisation.
Because there is a lot more competition for qualified individuals, you don’t necessarily have to take the first good offer that comes along. You’re interviewing the company as much as they are you. Ensure it’s going to be a good fit! Ask what the brand stands for and ensure that the operation matches the marketing claims.
What you can get out of your job
It’s a sellers’ market for quality talent. Everyone agreed that this is the time to map out your career aspirations, looking at where you want to be and the experience you need to get you to that goal. Sometimes that means looking for a new job, but it can also be an opportunity to expand your skills with your current employer. This was something highly valued by people surveyed, with 65% of professionals saying that improving their learning and development is more important than a pay rise (58%).
One tangible benefit for some in the workforce is around flexibility. ICC Sydney’s Britt notes, however, that doesn’t work for everyone. "There are not a lot of jobs that can work from home 5-days-a-week but there are different forms of hybrid working that might be valuable. Things like varying hours and using technology to shift burdens."
We don’t yet know how hybrid working is affecting productivity. There have been some surveys that show workers are working more because of the ease of accessing work tools. Others say challenges in communicating have harmed productivity. Everyone assembled agreed that it’s too soon to tell. "People say they’re being more productive, but we don’t know if that’s accurate. If we can get this teamwork, hybrid model working, it’ll be a benefit to the employer."