Australians set for developed world's biggest pay rise

Australian workers are set for a pay rise in 2012 and will earn more than their counterparts in the developed work, a new survey has revealed.

Many Australian workers can expect a pay rise in the coming 12 months, especially those employed in the resources sector in regional areas, according to Hay Group’s 2012 Australian Salary Movement Index (ASMI) Report.

The rising cost of living, a strong Australian dollar, a tightening employment market and critical skill shortages are some of the factors influencing this increase in Australian salaries.

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Hay Group forecasts salary adjustments of 4 per cent in fixed annual reward for all industry sectors in Australia in 2012 and 6.3 per cent for the resource sector - ahead of the US, UK and NZ that would get a 3 per cent rise across all levels in the market.

The study also found that those who had specialist knowledge or industry-specific technical skills will command a much higher premium compared to more common jobs such as marketing, sales and HR.

“The salary movements across the Australian market over the past 12 months tell an interesting story. The pay gap between the resources sector and the rest of the market has widened dramatically, mirroring the trends in the patchwork economy which is currently seeing some sectors struggling while others enjoy boom times,” Steven Paola, Senior Consultant at Hay Group and author of the 2012 Australian Salary Movement Index Report, says.

Incentivised pay is also more widely used, with employees earning more bonuses across all job levels.

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The most significant increase was at the executive and senior management level where target bonuses are forecast to contribute 37.9 per cent of total salaries - a jump from 30 per cent in 2011.

Australians earn more than developed world

The new ASMI report shows that Australians are out-earning their international counterparts with actual Australian salaries sitting highest when compared to other advanced and developing economies such as UK, US, New Zealand, China, India, UAE and Brazil.

This places Australia in a good position to retain local talent and also attract international talent.

“The global view is very positive, with Australian salaries sitting higher compared with other advanced economies and also against emerging economies, which are experiencing the fastest rate of growth,” said Paola.

However, there’s also a widening pay gap between various sectors with Hay Group attributing it to the boom in the west for mining, oil and gas and related industries.

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In sectors such as insurance, Fast Moving Consumer Goods, building materials, business services and retail, salaries were between three and 10 per cent below that of the national average, creating a challenge for these sectors.

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Region-wise, the notion that Sydney and Melbourne workers are better paid has been bunked despite the fact these cities have been ranked in the top ten most expensive cities in the world to live.

The performance of the resources sector is driving strong pays to resources active regions such as the regional areas of Western Australia.

Total salaries in regional WA command a 16.8 per cent premium above the market average, while regional Queensland and regional South Australia have salaries above the market average by 1.83 per cent and 1.03 per cent respectively.

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Sydney workers are now earning 0.1 per cent below the national average, while Melbourne workers earn around 1.2 per cent less than the national average. Brisbane workers earn salaries -3.32 per cent below the market, Adelaide sits even further below (-4.87), while Perth is the notable exception of all Australian capitals recording salaries 1.3 per cent above the average.

Jobs that are hot right now

Jobs in the resource sector attracted the highest premiums with mining engineers, petroleum engineers, construction project managers and exploration specialists among the ‘hottest’ jobs. 

However, many common jobs such as marketing, customer service, admin, HR and sales are not so hot and average actual salaries were between 2.5 and 8.6 per cent below that of the general market.

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