Remuneration Trends and Insights

Quarterly Remuneration Trends

Mercer’s Quarterly Remuneration Trends looks at Australia remuneration and the jobs market for the previous quarter.

 

 

Quarterly Remuneration Trends – Q1 2020

 

 
 


Movements remain stable at 2.5% in the first quarter of 2020


Executives received highest increases at 2.6%


Employees in Tasmania received the highest increases


The manufacturing, life science and transport/storage industries recorded the highest movements overall


Companies with parent locations in Europe passed on the highest increases
 


 

It is important to note this quarterly update reflects remuneration movements from our database covering the period 1 January to 31 March, prior to the impact of the COVID-19 epidemic.

Reported throughout this article is the Employment Cost (EC) remuneration aggregate. Commonly referred to as ‘total package’ or ‘fixed remuneration’, Employment Cost includes base salary, cash allowances, benefits and fringe benefits tax (FBT), but excludes variable reward.

 

Mercer’s remuneration database operates on a rolling basis, with organisations providing remuneration data submissions throughout the year. As a result, each quarter we share the overall remuneration trends in addition to industry-specific results for those sectors for which reportable data is available.

 

ALL-DATA MOVEMENTS


According to Mercer’s database, the median employment cost movement for same incumbents (the same people in the same role at the same organisations) in the general market remained stable at 2.5% over the first quarter of 2020.

 

Due to the current situation with COVID-19, Mercer Australia has paused remuneration forecasts from 1 April 2020. Our databases published prior to this date are still effective as of the dates published, though we advise against projecting (i.e. 'aging') market remuneration data past 1 April 2020 given current levels of economic uncertainty.

 

With regards to remuneration actions for organisations approaching the typical 'remuneration review' period, experience from prior economic downturns globally suggests muted salary increases or freezes and reduced incentive payments will be observed as organisations preserve cash to weather economic headwinds. During this period Mercer advocates for a prudent approach to ensure employment is maximised and businesses remain solvent.

Source: Mercer's remuneration database

 

 

Distribution of increases
 

 

Source: Mercer's remuneration database

 

 

Whilst the overall median same-incumbent fixed pay movement has remained stable on the previous quarter at 2.5%, there has been a broader range of increases passed on by organisations in our database. As the figure shows, 24% of same-incumbent increases recorded in Mercer’s database to the end of March have been between 2% and 2.99%, with a further 40% receiving increases of 3% or higher. While just over 12% of incumbents received zero increase.

 

When looked at by industry, the majority of incumbents in our database from most sectors received median increases of between 2% and 3%. The health care sector had the highest proportion of incumbents receiving increases greater than 5%. While the professional services sector had the highest proportion of zero increases (salary freeze).

 

 

Career stream movements

 

The staff category that recorded the highest median EC movements this quarter were executives at 2.6%. Management, professionals and para-professionals were next in line, recording median movements of 2.5%. Heads of organisations recorded the lowest median EC movements at 2.4%.

Source: Mercer's remuneration database

 

 

Location movements

 

Employees in Tasmania recorded the highest median EC increases at 3.8%. While employees in both the Australian Capital Territory (2.6%) and Western Australia (2.7%) received movements above the general market movement. Over the same period, salary movements for employees in Queensland, South Australia and Victoria were on par with the general market movement of 2.5%.  While New South Wales and the Northern Territory recorded 2.4%.

Source: Mercer's remuneration database

 

 

Job family movements

 

All job family movements remain at or around the overall general market movement sitting between 2% and 3%. Roles in the retail, and trading & dealing  job families were awarded the highest increases with a median movement of 2.9%. At the opposite end of the scale, the data analytics/warehousing & business intelligence, creative & design, hospitality, and real estate management job families recorded the lowest median movement at 2%. 

Source: Mercer's remuneration database

 

 

Industry movements

 

The manufacturing, life science and transport/storage industries recorded the highest median movements over the first quarter of 2020 at 3%. Conversely, the industry sector passing on the lowest increases this quarter was professional services at 1.7%.

Source: Mercer's remuneration database

 

 

Movements by parent location

 

Organisations with their parent company located in Europe (excluding the United Kingdom) recorded the highest median movements at 3%, followed by those with a parent company located in the United Kingdom or the United States of America at 2.5%. While Asian headquartered organisations reported the lowest median movement across the first quarter of 2020 at 2%.

Source: Mercer's remuneration database

Disclaimer: While every care has been taken to ensure the accuracy of the information, no warranty is given in respect thereof.


 

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