Pay rises to ‘beat inflation’ looking scarce

Yasmine Raso

Senior Journalist, Financial Newswire

1 December 2022

A new survey from global recruitment consultancy, Robert Walters, has revealed the extent to which inflation has swallowed the purchasing power of pay packages, as pay rises continue to fall short of rising cost of living expenses.

The firm’s latest Salary Survey found 78 per cent of white-collar workers who responded to the poll said they will commence the search for a new job if they do not receive a pay rise that “beats inflation” in the next 12 months.

The figures also revealed on the other side that 56 per cent of employers surveyed said they do not expect to offer salary increases above the Consumer Price Index (CPI) in that same time period, as inflation continues to put pressure on typical recruitment and retention strategies.

Almost all candidates (97 per cent) told researchers that the minimum amount for a “fair” pay rise would need to either match or exceed inflation, while 65 per cent said they expect their employer to consider cost of living pressures when determining salary increases and bonuses in the next 12 months.

Over two thirds (68 per cent) of employers surveyed said the rising cost of living is set to make employee retention more difficult, particularly during a period of skills shortages.

“We are fast approaching what appears to be the most complex and challenging recruitment environment in recent years – yet another blow to households already feeling the pinch as the cost of living climbs,” Shay Peters, Managing Director of Robert Walters Australia & New Zealand, said.

“Much has been made of the ongoing skills shortage in Australia, and the power it has given candidates seeking to secure bigger salaries and additional benefits.

“These inflationary pressures may now shift that dynamic, with the previous ‘at all costs’ approach from companies desperate for new recruits now offset by spiralling operating costs and energy bills.

“With the Reserve Bank of Australia using all available levers to bring down inflation, the days of surging salary offers may be behind us – for the short term at least.”