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 – Q2 2020

 

 
 


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


Executives, professionals and para-professionals saw increases at 2.5%


Employees in Tasmania received  increases above the national average


The life science industry passed on the highest movements overall


Companies with parent locations in Europe 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 remained stable at 2.5% over the second quarter of 2020. It is worth nothing that whilst the data reported here covers the period of 1 April to 30 June, 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 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, 24.3% of same-incumbent increases recorded in Mercer’s database to the end of June have been between 2% and 2.99%, with a further 39.7% receiving increases of 3% or higher. While just under 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 hospitality and recreation 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, professionals and para-professionals at 2.5%. Management and  heads of organisations recorded median EC movements of 2.4% and 2.1% respectively.

Source: Mercer's remuneration database

 

 

Location movements

 

Employees in Tasmania recorded the highest median EC increases at 3%. While employees in Western Australia (2.7%) received movements above the general market movement. Over the same period, salary movements for employees in Queensland and South Australia were on par with the general market movement of 2.5%.  While the Australian Capital Territory, Victoria, New South Wales and the Northern Territory all recorded movements below the median general market movement.

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 customer service and contact center operations job family were awarded the highest increases with a median movement of 3%. At the opposite end of the scale, the data analytics/warehousing & business intelligence, hospitality, and real estate management job families recorded the lowest median movements at 2%. 

Source: Mercer's remuneration database

 

 

Industry movements

 

The life science industry recorded the highest median movement over the second quarter of 2020 at 3.1%. Conversely, the industry sector passing on the lowest increases this quarter was professional services at 0%.

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 2.7% and 2.5% respectively. While Asian headquartered organisations reported the lowest median movement across the second quarter of 2020 at 2.1%.

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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