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Pay rise coming for 9 in 10 Aussies, but it probably won’t be enough

money and people walking to work
Employees are now feeling confident to ask for a pay rise because skilled workers are in short supply. (Source: Getty)

The bulk of the Australian workforce can expect a pay rise this year, although more than half of these pay bumps will barely keep pace with the rising cost of living.

Salary data released by Hays revealed almost nine in 10 employers planned to increase staff salaries in the next 12 months.

However, most employers (51 per cent) planned to dish out a salary increase of less than 3 per cent.

Most professionals will expect a bigger pay rise, given the skills shortages plaguing most industries, with 84 per cent hoping for a higher wage increase than 3 per cent.


Most industries are still struggling to fill roles, with job ad volumes increasing consistently all year, according to SEEK figures. Applications per job have also been at record lows.

Australian workers are also facing higher prices for fuel, energy and groceries as the cost of living soars. The consumer price index increased by 2.1 per cent in the March 2022 quarter and 5.1 per cent annually.

As such, only 31 per cent of employees were satisfied with their current salary, according to the Hays survey of 9,000 respondents across 4,425 organisations, with most believing their performance warranted higher pay.

While the gap between employee and employer expectations on pay remains, more employers are considering decent pay increases compared to last year.

Only 12 per cent of salaries rose by more than 3 per cent last year, while 37 per cent of employers are considering an increase above 3 per cent this year.

Worker shortages driving higher pay

Wages do tend to go up when there’s low unemployment and fewer workers competing for the same job.

However, some experts have argued that government policies have also stymied wage growth.

Research by the Centre for Future Work found several policy factors had held wage growth back over recent years, including failing to act adequately on the gig economy and imposing pay caps on public servants.

Workers aren’t scared to ask

Employees also felt emboldened to demand better pay given the current job market, according to the Hays research, with more than 56 per cent hoping to secure a pay rise on these grounds.

Around 54 per cent of employees had already seen a pay increase, either at their current employer or by taking a new job.

Employers looking to retain talent in the hot job market may want to consider boosting salaries, with an uncompetitive salary motivating 49 per cent of job searches, up from 39 per cent last year.

The skills shortage had also prompted employers to pay more for new recruits than they had planned.

As many as 34 per cent of employers said they had offered “substantially” higher salaries, while 43 per cent offered “nominally” higher salaries.

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