More construction professionals are expected to receive a pay rise this year than last, but a new report by employment agency, Hays, indicates it will be a less significant increase than they hoped for.
According to the FY 2019/20 Hays Salary Guide, based on a survey of more than 3,400 organisations, 88 per cent of construction, engineering and property industry employers will increase salaries in their next review, up from 84 per cent who did so in their last review. However, the value of these increases will fall.
54 per cent intend to raise salaries at the lower level of 3 per cent or less, up from 45 per cent who did so in their last review. At the other end of the scale, just 7 per cent of employers, down from 15 per cent, intend to grant pay increases of more than 6 per cent.
Professionals prioritise a salary increase
For their part, 22 per cent of the construction, engineering and property professionals Hays interviewed expect no increase whatsoever, while a further 29 per cent expect 3 per cent or less.
Yet another 29 per cent expect between 3 and 6 per cent and the final 20 per cent expect a raise of 6 per cent or more.
It is unsurprising then, that more than half (57 per cent) state that a salary increase is their number one career priority this year.
The report outlines that 46 per cent intend to achieve this by asking for a pay rise, while others are looking elsewhere – 41 per cent of job seekers said that their current uncompetitive salary provoked their job search.
‘Tug of war over salaries’
Senior Regional Director of Hays Construction, Simon Bristow, said that it’s clear the aggregate effect of several years of sedate salary increases is taking its toll and we’re now seeing a tug of war over salaries.
“On the one hand, we have professionals telling us they’ve prioritised a pay rise and are prepared to enter the job market to improve their earnings. On the other, employers tell us they want to add to their headcount and are being impacted by skill shortages, yet they plan to curtail salary increases.”
Salary trends also vary by location. For example, while salary pressure has stabilised in NSW, in Canberra continuing staffing shortages are expected to ensure gentle upwards pressure on salaries in 2019-20.
Mr Bristow said that in Victoria, demand is rising for experienced Contract Administrators, Project Managers, Design Managers, Engineers and Site Managers in civil infrastructure and the commercial market. Salaries continue to increase as a result.
Meanwhile in Tasmania, Hays forecasts ongoing skill shortages will keep upward pressure on salaries – particularly in infrastructure.
“South East Queensland’s solid project pipeline will fuel high demand for Commercial Estimators, Contract Administrators and infrastructure professionals. However, we expect salaries to remain relatively stable after a period of growth,” he said.
Mr Bristow further commented that Perth’s active commercial sector is expected to create demand for Project and Construction Managers. Despite this, salaries will remain stable.
“Commercial construction has improved in South Australia and the civil construction market will be strong. Salaries, however, will remain stable. Salaries will also remain consistent in Darwin,” he confirmed.
“We’re also seeing salary growth in regional locations. This is likely to continue as organisations attempt to attract skills in short supply from major cities.”
In other key findings, the 2019-20 Hays Salary Guide found:
- 67 per cent of organisations offer flexible salary packaging. Of these, the most common benefit is salary sacrifice, offered by 55 per cent of employers to all employees. This is followed by above mandatory superannuation (offered by 37 per cent of employers to all their employees), parking (33 per cent), bonuses (27 per cent) and private health insurance (26 per cent).
- Of the benefits offered to a select few employees, private expenses tops the list, with 70 per cent of employers offering it to a hand-picked number of employees.
- 68 per cent of employers said business activity had increased over the past year, with 70 per cent expecting it to increase in the next 12 months.
- 47 per cent intend to increase permanent staff levels over the coming year.
- 70 per cent say skill shortages will impact the effective operation of their business or department in either a significant (28 per cent) or minor (42 per cent) way, up from 67 per cent last year.
- 54 per cent of employers are restructuring to keep up with changing business needs – the key driver of these restructures is a change in the required skill sets.
- In skill short areas, 57 per cent of employers would consider employing or sponsoring a qualified overseas candidate.
More information on the FY19/20 Hays Salary Guide can be found here.