KNOW YOUR MARKET HUB
January 2018 edition
Remuneration Trends and Insights
Welcome to Mercer’s Know Your Market Hub!
Bringing you the most up-to-date trends in remuneration and insights on the current rewards environment, key economic data affecting pay decisions, topical HR issues and much more! The hub is updated each month to ensure you have access to the most current and reliable information. In this edition we shine the spotlight on two topics: winning the fight for salary increase budgets, and managing expatriates in hardship locations, see below to view the full articles. If you have any questions, suggestions or have an interest area that you would like us to cover please take a minute to contact us.
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The Talent Insights team
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REMUNERATION MOVEMENTS AND FORECASTS
The median general market employment cost same-incumbent movement has moved down slightly from figures recorded throughout 2017 and sits at 2.4% as we commence 2018.
The projection for salary increases to 2018 is sitting at 2.5%.
MEDIAN SAME INCUMBENT MOVEMENTS - BY INDUSTRY TO JANUARY 2018
The market has continued to soften, with organisations passing on modest salary increases compared with figures recorded throughout 2017. The median movement in fixed remuneration fell slightly from figures recorded throughout the majority of 2017 and sits at 2.4% in January 2018, with movements for executives remaining above all other staff categories. The Australian economy has remained stable for the most part with inflation and wages growth experiencing very slight rises. The unemployment rate rose by 0.1% in December 2017 to 5.5%, but remains lower than the three-year moving average of 5.7%, which is encouraging. The projection for salary increases to 2018 sits at 2.5%.
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PAY INCREASE BAROMETER
The pay barometer measures the extent to which salaries are passed on ‘at’ (stable), ‘below’ (contraction) or ‘above’ (expansion) market rates in the past six months. Results for the barometer this month show that pay increases over the past six months have remained steady with no change to the number of individuals in the sample receiving ‘at’ (stable) market increases.
REMUNERATION SENTIMENT INDEX
The remuneration sentiment index measures the general feeling of the remuneration and jobs market. The remuneration sentiment index again has recorded a positive result this month, recording a score of 23.0% in January 2018, another strong result.
NEW HIRE PAY rates
The new hire pay index has fallen and currently sits at -0.9% in January. This means that, overall, the market is currently offering new employees salaries 0.9%, on average, below existing employees.
Gender Pay Index
Job market conditions indicate the gender pay index is currently sitting at 2.8% in January. Overall, the market is currently offering female employees salaries 2.8%, on average, below male employees in the same role.
KEY ECONOMIC INDICATORS
(September 2017 – Seasonally adjusted)
(December 2017 – Weighted average of eight capital cities (yearly)
(September 2017 – Seasonally adjusted)
(December 2017 – Seasonally adjusted)
National unemployment recorded a figure of 5.5% in December, a slight rise compared to the previous month. GDP growth is at 2.8%, which is encouraging for the most part. Meanwhile WPI at 2.0% remains stubbornly low and is continuing to puzzle economists, though with CPI sitting at 1.8%, real wage increases are within reach for some workers.
Source: ABS catalogues 5206.0, 6401.0, 6202.0, 6345.0
WINNING THE FIGHT FOR SALARY INCREASE BUDGETS
This article from Mercer Select IntelligenceSM examines the salary increase budgeting process and outlines action items based on results from Mercer’s 2017 Rewards Decision-Making and Communications Survey.
GLOBAL MOBILITY - EXPATRIATES IN HARDSHIP LOCATIONS
International assignment management is complex at the best of times, but even more so for companies who relocate people to challenging locations. In this article, two of Mercer’s Mobility experts, Olivier Meier and Slagin Parakatil, share their insights into dealing with emergencies in such locations.