Good Economy = Salary Negotiations

Are Australia's good economic results providing a boost for salary expectations? The stronger dollar combined with good employment figures and the emerging skills shortage creates a good environment dor salary negotiations.

We’ve seen throughout the year a number of factors emerging that have created an environment for employees to approach their boss seeking a pay rise.

 

These factors include the stronger Australian dollar; improving job numbers (i.e. unemployment rate) and the [current] skills shortage.

 

Australia’s job market has generally recovered well (in comparison). For example the December labour force figures show that unemployment reduced to 5.1% (nationally) with a participation rate of 66%. This ostensibly leads to more opportunity for job seekers.

 

Given the good figures, it is understandable that employee confidence is increasing, and with this confidence comes the expectation of likely and favourable salary negotiations.

 

In a recently conducted ‘Employer Confidence’ survey, it was identified that employment levels continue to out perform expectations, and [employee] incomes are starting to show significant growth.

 

Further, employers should put some thought into providing growth opportunities (thus increasing competitiveness) in this current economic climate. Employers should also understand competition for ‘skilled workers’ is indeed fierce!

 

It seems that small to medium enterprises (SME’s) will be under increasing pressure to look after their staff with initiatives including training - which of course helps the organisation achieve its corporate goals which helps with staff satisfaction. And although training is important, it can’t be to the exclusion of financial reward.

 

In September of 2010, Mercers published their latest Salary Survey which showed that pays had rebounded from the constraints of the GFC. The survey also found that salaries are forecast to increase (on average) by 4% in 2011.

 

Employees will no doubt be seeking relative increases plus some catch up (given salary increases were on hold last year).

 

The Australian economy has been steadily improving and therefore it will be among the better performing economies in 2011. Combined with strong employment figures, things look bright for [most] organisations…so you can understand that employees will be looking for this good news to flow onto them.