Remuneration movements and forecasts

January 2019

Quarterly remuneration trends - Q4 2018


Graphdown

Movements increased to 2.6% in the last quarter of 2018

Briefcase

Professionals and executives receiving highest increases

Signpost

Australian Capital Territory (ACT) again awards highest pay rises

beaker

Health care, manufacturing and professional sectors record the highest movements

map-uk

Companies with parent locations in Africa and the USA pass on highest increases



Reported throughout this article is the Employment Cost (EC) remuneration aggregate. Commonly referred to as ‘total package’ or ‘fixed remuneration’, employment cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

Mercer’s remuneration database operates on a rolling basis, with organisations providing remuneration data submissions throughout the year. As a result, each quarter we share the overall remuneration trends in addition to industry-specific results for those sectors for which reportable data is available.

ALL-DATA MOVEMENTS

According to Mercer’s database, the median EC movement for same incumbents (the same people in the same role at the same organisation) in the general market has increased to 2.6% over the past quarter. Mercer’s forecast for the calendar year will see the figure likely remain at 2.6%.

Median employment cost movements

Figure 1 Time series Median employment cost same incumbent movements

Source: Mercer's remuneration database

Distribution of increases

Distribution of same-incumbent increases

Figure Distribution of same incumbent increases

Source: Mercer's remuneration database

Whilst the overall median same-incumbent fixed pay movement has increased slightly on the previous quarter to 2.6%, there has been a broader range of increases passed on by organisations in our database. As the graph shows, 41.2% of same-incumbent increases recorded in Mercer’s database in the three months to the end of December have been between 2% and 2.99%, with a further 9.7% between 3% and 3.99%. Thirteen percent of incumbents received zero increase, whilst 7.9% received increases of 5% or greater.

When looked at by industry, between 52% and 66% of incumbents in our database from the construction and engineering and chemical sectors received increases of between 2% and 2.99%. Furthermore, some 22% of same incumbents in the construction and engineering sector received movements between 4% and 5%. The manufacturing sector received the highest proportion of increases of greater than 5%, at just under 31%.

Salary freezes (zero increases) were most common in the retail sector with around 40% of same-incumbents not seeing any increase.

Career stream movements

The staff categories that recorded the highest median EC movements this quarter were professionals and executives at 2.7% – outpacing the general market overall. Head of organisation were next in line, recording a movement equal to the overall general market movement at 2.6%. Para-professional and management level staff recorded an EC movement lower than the overall general market movement at 2.5%.

Median same-incumbent movements by career stream

Figure 2 Median Same-Incumbent Movements by Career Stream

Source: Mercer's remuneration database


Location movements

The Australian Capital Territory (ACT) continued to record the highest median EC increases at 3.5%, with an increase of 0.5 percentage points on the previous quarter. Meanwhile, South Australia sits in second, with a movement of 2.8%. Over the same period, movements for employees in New South Wales and Tasmania have seen increases of 2.7% and 2.1% respectively. Queensland (2.6%), Victoria (2.5%), Western Australia (2.2%), and the Northern Territory (2%) have all remained stable compared to last quarter.

Median same-incumbent movements by location

Median same-incumbent movements by location

Source: Mercer's remuneration database



Job family movements

Most job family movements remain at or around the overall general market movement of 2.6%. Roles in the engineering job family were awarded the highest increases (3.3%). Next in terms of highest increases were the legal and communications job families, each recording a movement of 3%. At the opposite end of the scale, the job families with the lowest movements were retail, contact centre, and repair and maintenance at 2%.

Median same-incumbent movements by job family

Median same-incumbent movements by job family

 

Source: Mercer's remuneration database



Industry movements

The health care, manufacturing, and professional services industries (3%) recorded the highest movements over the fourth quarter of 2018. Life Science (2.9%) and high-tech (2.8%) recorded above overall general market movement. Conversely, the industry sectors passing on the lowest increases this quarter were education and research (1.6%), transport/storage (2%), agriculture (2%), and retail (2%).

Same-incumbent movements by industry sector

Median same-incumbent movements by location

Source: Mercer's remuneration database



Movements by parent location

Organisations with their parent company located in Africa and the United States of America (USA) recorded the highest movements at 3%. Organisations with a parent company located in the United Kingdom (UK) recorded the next highest movement at 2.7%, which was an increase of 0.5 percentage points on last quarter. While Europe (excluding the UK) reported the lowest movement for the last quarter of 2019 at 2%.

Same-incumbent movements by parent location

Median same-incumbent movements by location

Source: Mercer's remuneration database

©2019 Mercer LLC, All Rights Reserved.