trends and predictions for pay and reward
The economy is starting to pick up, with increased confidence expressed by organisations looking ahead over the next six months, as well as a marginal increase in the median fixed salary. Market-leading research from Randstad shows that work-life balance is now the most important factor for employees in Australia when considering an employer. This was an increase of 7% from 2017, with salary and benefits dropping 8% from the top position in 2017 to second place in 2018. Although the gender pay gap has narrowed across every managerial occupation in Australia in the three years to 2016-2017, there is still some way to go, with the average full-time gender pay gap at 17.3%, according to a 2018 report by the Workplace Gender Equality Agency. Organisations that undertake a pay gap audit are more likely to decrease their gender pay gap over time, especially if specific actions are taken.
The latest economic indicators from the Australian Bureau of Statistics (ABS) characterise the Australian economy as having modest GDP growth, a stable unemployment rate, low wage price growth and low inflation. The remuneration sentiment index recorded an optimistic outlook in April 2018, with over a third of organisations indicating more positive conditions in the next six months within their organisation. This is reflected in the 2.5% increase in the median fixed salary movement in the first quarter of 2018.
While pay and benefits are important, the rise of work-life balance for employees is becoming more so. Generational attitudes and expectations in today’s workplace are being shaped by the recent social movements and latest advances in technology. However, the same survey shows that employers consider offering pay and work-life balance as sixth and ninth place respectively in their top ten, demonstrating a disconnect between employee and employer.
The ‘2018 Randstad Employer Brand Research’ also reported that employees across the board in terms of age and education levels were open and flexible to change in order to remain employable. This is good news for employers looking to adopt new working practices to improve efficiency or introduce new initiatives to improve the organisational culture and work environment.
According to the Gender Equity Insights 2018 report, there is a clear link between employer action on pay equality and lower pay gaps. Most Australian organisations are taking pay equality serious, and this shows with a 10% increase of employers reporting a formal remuneration policy or strategy over the four years from 48.9% in 2013-2014 to 58.5% in 2016-2017. The mining industry leads by example with low gender pay gaps in total remuneration of 7.4% in 2016-2017, and reduced the overall gender pay gap in base salaries by 2.1% between 2015-2016 and 2016-2017.
Men working full-time earn on average an additional $26,469 each year than women that work full-time. Women who are employed full-time as top-tier managers can expect to earn almost 25% less than men, an annual difference of over $88,000 in total remuneration. This disparity increases in the Rental, Hiring and Real Estate sector, with women earning 31.4% less than men – an average difference of $45,000 each year.
Firms that undertook a pay gap audit and took action saw male top-tier managers salaries decrease by almost $4,000 on average, and female top-tier managers salaries increase by around 24% on average.
more articles about: pay and reward
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- working outside Australia
- key dates for your tax diary
- workers compensation insurance premiums
- trends and predictions for pay and reward
- principles of rewarding employees
- different generations – different motivations
- fringe benefits tax
- taxing the benefits of vehicles
- employers’ responsibility for tax and superannuation
- establishing the right reward system
- overtime, penalty rates and loadings
- pay: not the only reward