Remuneration movements and forecasts

October 2018

Quarterly remuneration trends - Q3 2018


Movements stable at 2.5% in the third quarter of 2018


Para-professionals and executives receiving highest increases


Australian Capital Territory (ACT) again awards highest pay rises


Retail and engineering sectors record the highest movements


Companies with parent location 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.


According to Mercer’s database, the median EC movement for same incumbents (the same people in the same role at the same organisations) in the general market has remained at 2.5% over the past quarter. This is now the third consecutive quarter that the EC movement has remained at this level. Mercer’s forecast for the calendar year will see the figure likely rise to 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 remained flat on the previous quarter at 2.5% there has been a broader range of increases passed on by organisations in our database. As the graph shows, overall, 37.5% of same-incumbent increases recorded in Mercer’s database in the three months to the end of September have been between 2% and 2.99%, with a further 27% between 3% and 3.99%. Around one in ten incumbents received zero increase whilst 5.5% received increases in of 5% or greater.

When looked at by industry, around 67% of incumbents in our database from the construction and engineering and chemical sectors received increases of between 2% and 2.99%. Furthermore, some 19% of same incumbents in the construction and engineering sector received movements between 4% and 5%. The manufacturing and fast moving consumer goods (FMCG) sectors received the highest proportion of increases of greater than 5%, at 31% and 25% respectively.

Salary freezes (zero increases) were most common in education and research, transport/storage, retail and hi-tech with around 15% of same incumbents not seeing any increase.

Career stream movements

The staff categories that recorded the highest median EC movements this quarter were para-professionals and executives at 2.7% – outpacing the general market overall – while professionals were next in line, also recording a movement greater than the overall general market movement at 2.6%. Heads of organisation and management level staff recorded an EC movement equal to the overall general market movement of 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 3.0%, with no change on the previous quarter. Meanwhile, South Australia, New South Wales, and Tasmania sit in equal second, with a movement of 2.6%. Over the same period, movements for employees in Victoria decreased to 2.5%, down from the 2.9% figure reported in the previous quarter. Queensland (2.6%), Tasmania (2.0%), and the Northern Territory (2.0%) have all remained stable compared to last quarter. Remuneration movements in Western Australia continue to recover and rose to 2.2%, the only state to record an increase on the previous 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 2.5%. Roles in the retail job family were awarded the highest increases (3.5%) with those in engineering closely following (3.2%). Next in terms of highest increases were quality, project engineering and legal, each recording a movement of 3.0%. At the opposite end of the scale, the job family with the lowest movement was repair and maintenance at 2.0%.

Median same-incumbent movements by job family

Median same-incumbent movements by job family


Source: Mercer's remuneration database

Industry movements

The retail industry (3.5%) recorded the highest movement over the third quarter of 2018 despite the figure remaining unchanged compared to the previous quarter. Health care (3.3%), manufacturing (3.0%), pharmaceuticals (3.0%) and professional services (3.0%) all recorded median movements of at, or slightly above 3.0%. Conversely, the industry sectors passing on the lowest increases this quarter were education and research (1.6%) and transport/storage (1.8%). The chemical sector recorded the largest percentage change of the third quarter, falling from 5.7% in the second quarter to 2.2%.

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 USA recorded the highest movements at 3.0%. Organisations with a parent company located in Australia recorded the next highest movement equal to the overall general market movement of 2.5%. Organisations with UK headquarters saw the largest quarterly increase, up from 0.4% in the three months to July to 2.2% this quarter. While Asia (2.2%) and Europe (excluding the UK) at 2.1%, reported lower movements on the previous quarterly figures.

Same-incumbent movements by parent location

Median same-incumbent movements by location

Source: Mercer's remuneration database

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