Rebuilding teams after the GFC

State of Pay

By Hannah Silverman    

Salaries are on the rise as employers share some of the financial diamonds reaped from a rough year in business. As the cloud above job security cleared, employers were able to see where the gaps in their businesses were and, according to recruitment firms, are now looking to restructure.

Business SA chief executive Peter Vaughan says the boom industries of the past year were in defence, mining and the hi-tech sector.

“At the bigger end of market there was certainly some identification that you need to hold on to very skilled workers because they’re in demand,” he says. “No doubt about that, many companies in SA are in what I call the `Robin Hood mode’ – they rob from those who are not able to pay as high salaries.”

The 2010 Hays Salary Guide shows about 45 per cent expect to increase their permanent head-count, compared with only 21 per cent in the previous year.

The same report suggests engineering professionals will be the “hottest commodity”, with 60 per cent expecting to increase staff, followed by purchasing department and human resources.

Hays Asia Pacific managing director Nigel Heap says that for the most part, salaries across the country remained constant during the past 12 months.

“Of course there were exceptions, with some companies offering lucrative salaries to attract top talent and aid staff retention,” he says.

“Others were more flexible with their salary packages. Today, however, quality candidates are in a much stronger position than they were a year ago.

“Those who sat tight during the GFC are now pursuing career development.

“Those who can add value are seeking salaries above their current level, as are those who accepted lower salaries during the downturn.”

Hays SA manager Amanda Marriott says the new financial year signalled a fresh chapter for the local jobs market.

“A renewed enthusiasm to recruit has steadily brought stability and fresh optimism to the market,“ she says.

The survey reveals most jobs – 62 per cent – received a pay rise of less than 3 per cent while 29 per cent increased by between 3 and 6 per cent, and 9 per cent jumped from 6 to 10 per cent.

Breaking down the industries, 52 per cent of the public sector showed pay increases of between 3 and 6 per cent while 78 per cent of the transport and distribution industry received less than 3 per cent.

Mercer’s Market Issues Survey, released earlier this year, predicts employees can now expect bigger pay increases.

But Mercer’s human capital business principal Martin Turner says that employees shouldn’t expect companies to play “catch-up” with salaries.

“It is a matter of both parties understanding recovery isn’t instant,” he says. “If employees have faced pay freezes and now expect organisations to make up for it, they’ll be disappointed.”

Entree Recruitment general manager Nicole Underwood says there are a number of job hunters looking for work.

“There are plenty of graduates on the market at the moment that can’t get mobilised into work because everyone wants someone with experience,” she says.

 “Employers were still in a bit of a honeymoon phase from a time where employers could choose to dictate the terms of employment during the GFC.”

With less vacancies, employers are more selective on their conditions of employment by way of salaries and hours, Ms Underwood says.

“They generally looked for more diversely skilled employees to help take up the slack across the business. We saw increases in blended roles, reception/accounts, for example,” she says.
In terms of morale the financial turmoil had a significant affect.

Crossways Consulting organisational psychologist and leadership coach Darryl Cross says the ramifications meant employers lacked confidence in hiring.

“However, it was the astute leader who recognised that when the others `zig’, they needed to `zag’,” he says.

“In other words, they saw fit to hire and expand because they saw a plentiful supply of people looking for work and realised that they could hire some very good personnel, then hang on until the upturn started.”

While morale is turning around, Dr Cross says people are still concerned about career progression and the constant pressure of earning enough money to cover major expenses.

Mining and defence, he says, will be a game changer when it comes to positivity for the job sector.

“Typically SA has lagged behind the other states, especially WA and Queensland, while NSW and Victoria seem to have been riding on their commercial coat-tails.”

Marketing
Nick Ryder, 23
SBS account co-ordinator, Stenmark Organisation
In the job five weeks: “Marketers have placed greater scrutiny on realising the value of their advertising dollars over the last 12 months. As such, the value seeking behaviour of consumers has prompted advertisers to make savvier choices when it comes to communication. Companies that continued to promote through the GFC are in a stronger position.

Science teacher
Bronte Nicholls, 47
Earth and life science teacher/assistant principal, Australian Science and Mathematics School
In the job 22 years: “There is a real shortage of senior maths and physics teachers. Part of my administration role is managing relief teachers to cover classes when teachers are absent. It has been difficult to source teachers because most have been able to secure contracts or permanent work. This includes graduates and overseas-trained teachers. It is particularly difficult for schools in rural and remote areas to attract senior maths/science teachers.”

Mining engineer
Jonathon Trewartha, 41
Principal mining engineer,
Golder Associates
In the job three months: “The industry is starting to pick up once again. Overall, the industry is seeing a continuation of demand from China and renewed interest among investors who are considering mine start-ups and expansion plans. South Australia is on the cusp of a mining boom with significant investment in exploration starting to pay off.”

Human resources
Sara Gioiosa, 25
HR co-ordinator, Hostworks Limited
In the job about three years: “With the resilience of the Australian economy, future growth is forecast. With this growth, HR has become a critical sector in enabling businesses to source and develop staff to pursue this growth. Management now recognises the importance of the HR function as, ultimately, it ensures the business is readily equipped to undertake major projects.”

Doctor intern
George Balalis, 25
Intern, Royal Adelaide Hospital
First year in the job: “Health care is an always-expanding sector, with the ever-increasing demands placed on it. It is an important part of our community that cannot be ignored. The sector has continued with the perennial difficulties regarding allocation of resources. Health care can be a very rewarding, interesting and varied sector to work in.”

WHAT PERCENTAGE SALARIES WILL BE INCREASED
Industry less than 3% 3%-6% 6%-10% 10%+
Advertising/media 69% 26% 5% 0%
Construction, Property & Engineering 43% 44% 10 % 3 %
Financial Services 44% 48% 7% 1%
Hospitality, Travel & Entertainment 54% 41% 5% 0%
IT & Telecommunications 57% 36% 7% 0%
Manufacturing 46% 49% 4% 1%
Mining & Resources 28% 54% 15% 3%
Professional Services 36% 54% 8% 2%
Public Sector 47% 51% 1% 1%
Retail 52% 47% 1% 0%
Transport & Distribution 51% 43% 4% 2%
Other 53% 43% 4% 0%

HOW THE COMING YEAR WILL AFFECT PERMANENT STAFF LEVELS
Industry Increase Decrease Remain
Accountancy & Finance 29% 9% 62%
Engineering 60% 9% 31%
Human Resources 48% 7% 45%
Information Technology 36% 18% 46%
Marketing 40% 5% 55%
Operations 50% 11% 39%
Purchasing 57% 6% 37%
Sales 43% 8% 49%
Other 52% 8% 40%

Source: 2010 Hays Salary Guide

Article from The Advertiser, August 28, 2010.


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