KNOW YOUR MARKET HUB
August 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 on a monthly basis, with the remuneration movements and forecast updated quarterly, ensuring you have access to the most current and reliable information.
In this edition we shine the spotlight on: the twin threats of aging and automation. See below to view the full article. 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.
Stay informed with our monthly Talent Talk email. We look forward to sharing the very latest trends and insights with you each month!
The Market Insights team
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QUARTERLY REMUNERATION MOVEMENTS AND FORECASTS - Q2 2018
The median employment cost (EC) movement for same incumbents (the same people, in the same role and at the same organisations) in the general market increased slightly to 2.5% in the second quarter of 2018.
In Q2 2018, the projection for salary increases for the next six months has remained at 2.5%.
QUARTERLY MEDIAN SAME-INCUMBENT MOVEMENTS - BY INDUSTRY FOR Q2 2018
Market Overview - Q2 2018
The median fixed salary movement for the second quarter of 2018 was again 2.5%, which is higher than the inflation rate of 2.1% recorded by the Australian Bureau of Statistics (ABS) in June 2018.
Mercer’s pay increase barometer has seen a significant shift in the proportion of salaries being passed on at above-market rates to below-market rates. Despite both this and ongoing low wage price growth (as recorded by the ABS), the market has continued to feel optimistic about the future.
Another notable development is that pay rates for newly hired talent have outpaced packages for existing employees over the past quarter.
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PAY INCREASE BAROMETER
Once again, there have been no major changes to the overall composition of the pay increase barometer this month, though the proportion of below-market (contraction) increases has risen slightly to 37%, bringing it on par with the proportion of at-market (stable) increases. To find out the results by industry, click below.
REMUNERATION SENTIMENT INDEX
The remuneration sentiment index score this month is 11.1%. This represents a decrease of some 14 percentage points compared to last month’s figure, but is nevertheless a high score indicating that sentiment about the remuneration and jobs market continues to be positive. Click below to find out more about how organisations perceive the remuneration and jobs market, both within their organisations and overall.
NEW HIRE PAY rates
In August 2018 we continued to see an upwards trend to the overall new hire pay rates, which rose marginally to 1.1% over the previous month. This result means that the new hire pay rate has now recorded a positive figure – indicating that the market is hiring at salaries above those already in the role – for four consecutive months. To find out which industries have contributed the most to this trend, click below.
Gender Pay Index
The gender pay index this month is 2.5%, which represents a marginal decrease from the July figure, and continues the downward trend we have seen over the past four months. Although the gender pay index has largely oscillated between 2.7% and 2.9% over the past year, the recent downward trend towards more equitable pay for males and females is encouraging. Which career levels, industry sectors and job roles have the largest gender pay gaps this month? Click below to find out.
KEY ECONOMIC INDICATORS
(March 2018 – Seasonally adjusted (yearly)
(June 2018 – Weighted average of eight capital cities (yearly)
(June 2018 – Seasonally adjusted)
(July 2018 – Seasonally adjusted)
Unemployment fell in July 2018 to 5.3% and is now at the lowest level in five and a half years (seasonally adjusted basis), while the Wage Price Index (WPI) and inflation (as measured by the Consumer Price Index (CPI)) remain low, both indicators recording no significant annual change. Gross Domestic Product (GDP) performed solidly and has maintained its sixth consecutive quarter of positive growth, rising to 3.1% over the 12 months to March 2018.
Source: ABS catalogues 5206.0, 6401.0, 6202.0, 6345.0
THE TWIN THREATS OF AGING AND AUTOMATION
Read this article to learn about the risks 15 countries face of rapid societal aging, and of older workers’ susceptibility to automation.
GLOBAL TALENT TRENDS
Mercer's latest Global Talent Trends study reveals this year's top workforce trends.