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 – Q3 2020

 

 
 


Movements decreased to 2.0% in the third quarter of 2020


Executives  saw increases of 2.5%


Employees in Victoria, South Australia and Western Australia received  increases above the national median


The professional services industry passed on the highest movements overall


Companies with parent locations in the United Kingdom recorded the highest increases
 


 

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 decreased to 2.0% over the third quarter of 2020. It is worth nothing that whilst the data reported here covers the period of 1 April to 30 September, when the effects of the pandemic were influencing the economy, many organisations had already passed on their remuneration increases. Reported here are annual movements in salary and as such may not fully reflect actions taken by organisations in response to the economic downturn.

 

Due to the ongoing pandemic, 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 decreased on the previous quarter to 2%, there has been a broader range of increases passed on by organisations in our database. As the figure shows, 20.6% of same-incumbent increases recorded in Mercer’s database to the end of September have been between 2% and 2.99%, with a further 31.6% receiving increases of 3% or higher. While just under 22% 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 1% and 3%. The mining sector had the highest proportion of incumbents receiving increases greater than 5%. There was quite a significant proportion of incumbents within the professional services sector that also received increases greater than 5%. It is important to note that the majority of these incumbents within the sample come from legal firms, where early and mid-career lawyers typically receive higher increases as they gain experience. On the other side of the spectrum the manufacturing sector received the highest proportion of zerio increase (salarry freeze).

 

 

Career stream movements

 

The staff categories that recorded the highest median EC movements this quarter were executives and para-professionals, reporting 2.5% and 2.2% respectively. Management and professionals recorded median EC movements of 2% with deads of organisation receiving the lowest median movements of 1.5%.

Source: Mercer's remuneration database

 

 

Location movements

 

Employees in Victoria recorded the highest median EC increases at 2.3%. While employees in Queensland (2.2%), South Australia (2.2%) and Western Australia (2.1%) received movements above the general market movement. Over the same period, salary movements for employees in Tasmania and New South Wales were on par with the general market movement of 2%.  While the Australian Capital Territory and the Northern Territory both recorded movements below the median general market movement.

Source: Mercer's remuneration database

 

 

Job family movements

 

Roles in the legal, compliance and audit job family were awarded the highest increases with a median movement of 4.7%. At the opposite end of the scale, the project/program management job family recorded the lowest median movements at 1.8%. 

Source: Mercer's remuneration database

 

 

Industry movements

 

The professional services industry recorded the highest median movement over the third quarter of 2020 at 4.3%. As mentioned earlier, this sample is heavily influenced by the large proportion of incumbents that have been included from legal firms. Conversely, the industry sector passing on the lowest increases this quarter was manufacturing where the median movement was zero.

Source: Mercer's remuneration database

 

 

Movements by parent location

 

Organisations with their parent company located in the United Kingdom recorded the highest median movements at 2.2%, followed by those with a parent company located in Australia and Asia at 2%. While organisations headquartered in the United States of America reported the lowest median movement across the third quarter of 2020 at zero.

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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