Remuneration Trends & Insights

Bringing you the most up-to-date information on remuneration trends and insights on the current rewards environment, key economic data affecting pay decisions, topical HR issues and more.

Remuneration movements and forecasts

This report provides the latest movements observed across Mercer's workforce database for the Australian market. Our database operates on a rolling basis, with organisations providing workforce data submissions throughout the year. As a result, we can provide you with regular and up to date market trends.

Remuneration trends overview

The median employment cost movement for the fourth quarter of 2023 was 4.5%, and was above the inflation rate of 4.0% (seasonally adjusted) recorded by the Australian Bureau of Statistics (ABS) in the year to December 2023. The official unemployment rate increased to 3.9% at the end of the fourth quarter. GDP growth remained positive, but at a slower rate.

4.5% Employment cost movement

The median employment cost movement for same incumbents (the same people, in the same role and at the same organisation) in the general market was 4.5% in the fourth quarter of 2023. Employment cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

3.5% - 4.5% Total salary increase forecast for 2024

Mercer's Salary Budget Snapshot collects ongoing insight into remuneration planning intentions. Total salary refers to annual budgeted amount for employee salary increases, including promotional increases, adjustments for inflation, mandatory increases, indexation and merit increases. The latest total salary increase forecasted for 2024 ranged from 3.5% (25th percentile) to 4.5% (75th percentile); the median was 4.0%.

Median same incumbent movement by industry [Q4 2023]

Unless otherwise noted, figures represent the percentage change in total employment cost for an employee in the same role in the same company over a twelve month period. This is referred to as a same incumbent movement. Results shown below represent the median or 50th percentile of movements for different industries in the Australian market.

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Remuneration trends overview

The median employment cost movement for the third quarter of 2023 was 4.5%, and was lower than the inflation rate of 5.3% (seasonally adjusted) recorded by the Australian Bureau of Statistics (ABS) in the year to September 2023. The official unemployment rate remained at 3.6% at the end of the third quarter. GDP growth has slowed but remained positive. The gap between the Wage Price Index and the Consumer Price Index has been narrowed due to slowdown in CPI growth.

4.5% Employment cost movement

The median employment cost movement for same incumbents (the same people, in the same role and at the same organisation) in the general market was 4.5% in the third quarter of 2023. Employment cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

3.5% - 4.5% Total salary increase forecast for 2024

Mercer's Salary Budget Snapshot collects ongoing insight into remuneration planning intentions. Total salary refers to annual budgeted amount for employee salary increases, including promotional increases, adjustments for inflation, mandatory increases, indexation and merit increases. The latest total salary increase forecasted for 2024 ranged from 3.5% (25th percentile) to 4.5% (75th percentile); the median was 4.0%.

Median same incumbent movement by industry [Q3 2023]

Unless otherwise noted, figures represent the percentage change in total employment cost for an employee in the same role in the same company over a twelve month period. This is referred to as a same incumbent movement. Results shown below represent the median or 50th percentile of movements for different industries in the Australian market.

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Remuneration trends overview

The median employment cost movement for the second quarter of 2023 was 4.0%, and was lower than the inflation rate of 6.1% recorded by the Australian Bureau of Statistics (ABS) in the year to June 2023. The official unemployment rate remained at 3.5% at the end of the second quarter. GDP growth has slowed but remained positive, and the Wage Price Index has increased although it remained low by comparison to inflation.

4.0% Employment cost movement

The median employment cost movement for same incumbents (the same people, in the same role and at the same organisation) in the general market was 4.0% in the second quarter of 2023. Employment cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

3.5% - 5.0% Total salary increase forecast for 2024

Mercer's Salary Budget Snapshot collects ongoing insight into remuneration planning intentions. Total salary refers to annual budgeted amount for employee salary increases, including promotional increases, adjustments for inflation, mandatory increases, indexation and merit increases. The latest total salary increase forecasted for 2024 ranged from 3.5% (25th percentile) and 5.0% (75th percentile); the median was 4.0%.

Median same incumbent movement by industry [Q2 2023]

Unless otherwise noted, figures represent the percentage change in total employment cost for an employee in the same role in the same company over a twelve month period. This is referred to as a same incumbent movement. Results shown below represent the median or 50th percentile of movements for different industries in the Australian market.

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Remuneration trends overview

The median employment cost movement for the first quarter of 2023 was 3.5%, and was lower than the inflation rate of 7.1% recorded by the Australian Bureau of Statistics (ABS) in the year to March 2023. The official unemployment rate remained at 3.5% at the end of the first quarter. GDP growth has slowed but remained positive, and the Wage Price Index has grown although it remained low by comparison to inflation.

3.5% Employment cost movement

The median employment cost movement for same incumbents (the same people, in the same role and at the same organisation) in the general market was 3.5% in the first quarter of 2023. Employment cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

3.5% - 5.0% Total salary increase budget for 2023

Mercer's Salary Budget Snapshot collects ongoing insight into remuneration planning intentions. Total salary refers to annual budgeted amount for employee salary increases, including promotional increases, adjustments for inflation, mandatory increases, indexation and merit increases. The latest total salary increase budgeted for 2023 ranged from 3.5% (25th percentile) and 5.0% (75th percentile); the median was 4.0%.

Median same incumbent movement by industry [Q1 2023]

Unless otherwise noted, figures represent the percentage change in total employment cost for an employee in the same role in the same company over a twelve month period. This is referred to as a same incumbent movement. Results shown below represent the median or 50th percentile of movements for different industries in the Australian market.

 

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Access more details on our trends and insights. This report is updated monthly.

Monthly remuneration overview

Pay increase barometer

Mercer’s pay increase barometer measures the extent to which salaries are passed on at, below or above market rates in the past nine months. The term "contraction" represents annual movements that are more than one percent below the overall median market movement, and "expansion" represents movements that are more than one percent above the overall median market movement. "Stable" represents annual movements that are within +/- one percent of the overall median market movement. 
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Gender pay index

Mercer's gender pay index measures the difference between average salaries for male and female employees working in the same role within the same organisation, expressed as a percentage of male employee's average salaries. A positive percentage indicates that male employees’ salaries are higher than female employees in the same role within the same organisation, while a negative percentage indicates that female employees' salaries are above those being paid to male employees in the role.
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Distribution of increases

Mercer’s distribution of increases provides the distribution of individuals based on their annual salary movements broken down into ranges. This gives insight into the percentage of individuals being reported at each level of annual movements, for example, between 3% to 4%, or in excess of 5%.
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New hire pay rate

Mercer’s new hire pay rate measures the relativity between salaries offered to hire new staff compared to existing employees in the same role within an organisation. A negative value indicates that the market is hiring at salaries below those being paid to existing employees, while a positive figure indicates that new hires are attracting salaries above employees currently in the role.
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Key economic indicators

Gross Domestic Product (GDP) measures the size of an economy by the total production of goods and services in the economy. Consumer Price Index (CPI), also known as inflation, measures changes in the price level of a market basket of consumer goods and services purchased by households. Wage Price Index (WPI) measures changes in wage and salary costs for a selection of jobs, unaffected by changes in the quality and quantity of work performed. The unemployment rate indicates the number of unemployed people expressed as a percentage of the labour force in the same group.
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This content is intended to inform clients of Mercer’s views on particular issues. It should not be relied upon or used as a substitute for professional advice specific to a client’s individual circumstances. Whilst Mercer believes the prospective information and forward looking statements made by Mercer in this report are based on reasonable grounds, they are predictive in character and may therefore be affected by inaccurate assumptions or by known or unknown risks and uncertainties. This content has been prepared by Mercer Consulting (Australia) Pty Ltd (MCAPL) ABN 55 153 168 140. ‘MERCER’ is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.
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