Businesses are set to pay thousands more in salary increases as they attempt to hold onto key staff who intend to leave as a result of feeling undervalued and underutilised during the financial crisis, key surveys have revealed.
About 24% of businesses say their biggest concern is a growing skills shortage, according to a new survey from recruitment company Randstad.
The Randstad survey of about 2,330 companies has revealed 78% of companies in the IT and education sectors expect difficulty in finding skilled staff. In the construction sector, about 77% of companies expect skills shortages, while shortfalls are also expected in the mining industry.
A separate survey from Leadership Management Australasia confirms this expected shortfall, revealing a 135% increase in the number of Australian employees since September actively searching to change jobs.
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The LMA survey, which questioned over 4,500 employees, shows a 64% increase in the number of employees actually applying for new jobs.
LMA managing director Grant Sexton says these two surveys reveal there will inevitably be further pay increases this year as desperate companies prepare to pay thousands more for key staff to stay on.
Sexton says the amount of employees looking for new work opportunities exceeds the number recorded in 2006-08, when employers were paying salary increases up to 30% in order to keep staff.
This time around, the salary increases could be even higher, putting pressure on company profits.
“We saw in 2006-08 that companies would pay ridiculous amounts of money to keep people on. Now the increase in people looking for new jobs is 135% since September, a jump like that is unheard of.”
Sexton says this is a reflection of disillusionment in the workplace. He says that during the financial crisis, companies demanded sacrifices from employees such as nine-day fortnights, ordering holidays to be taken early and a drop in working hours.
“As a result of this, companies came through the crisis exceptionally well. But as employees have come out the other side, they haven’t received any type of consideration or catch-up. There is no “thanks for your support”. Companies have been negligent about this.”
“Three or four years ago you were getting all types of incentives, including companies offering an extra $20,000 for people to stay. It was just so difficult to get good quality people, and now… the possibility is that you will see price hikes in wages over the next six to 12 months. Companies could have avoided this if they were smarter.”
Already, evidence of demand for pay increases missed out on during the GFC is already starting to be seen.
Aged care workers under the Liquor, Hospitality and Miscellaneous Union will take advantage of new IR laws to bargain with multiple employers at the one time, asking for a 60% wage claim for half of the 110,00 non-nursing workforce.
It is understood the union will look for wage claims between $7-$10 an hour. LHMU national secretary Louise Tarrant has said workers will be looking for wage rises traditionally enjoyed by other industries.
Saxton says all employees want is a little bit of recognition. Instead, most businesses forget to thank workers for their extra efforts during the financial crisis, and will suffer through a skills shortage as a result.
“If employees feel they are being recognised and looked after, they won’t move. The survey shows 87% of all employees would prefer to advance their career with their current employer, so there is an opportunity there.”
“Companies must recognise they have survived because of a talented workforce. Workers understand the issues facing the business, but companies haven’t communicated their appreciation to employees. They must do this in order to stop a problem before it escalates.”